1.1 billion dollars profit between price increases

In a week that saw Bitcoin rise to a staggering $42,000, Tether, the company behind the world's largest stablecoin, saw a massive increase in the value of its BTC holdings, making a staggering $1 billion in unrealized profits.

As of May 2023, Tether has collected 4,083 BTC.

Tether Bitcoin Holdings Soar

According to data compiled by crypto analyst EmberCN, Tether currently holds a staggering 57,576 BTC, which is roughly $2.4 billion. The average purchase price in Bitcoin is $22,480, representing an 85 percent increase in value. This essentially translated into an unrealized gain of $1.1 billion after the acquisition of these assets.

The main driver behind Tether's unrealized gains is the recent rise in the price of Bitcoin. The underlying asset briefly breached the $42,000 mark this week before settling at its current price of $41,700, a 13.1% gain over the past seven days.

Tether's Bitcoin holdings can be divided into two categories: firstly, 53,492 BTC was deposited before March of this year; Secondly, a strategic move was made in May 2023 whereby Tether decided to permanently allocate up to 15% of its net profits to Bitcoin.

Despite Bitcoin's volatility concerns, Tether sees it as a solid long-term investment. This decision is in line with the overall strategy to diversify the portfolio from conventional assets such as cash and cash equivalents.

Tether previously stated that its goal is to keep the value of the Bitcoin portfolio below the amount of the company's total profit reserves, which at the end of the first quarter of 2023 was $ 2.48 billion, BTC holdings were $ 1.5 billion.

Tether's Paulo Arduino said:

“The decision to invest in the world's first and largest cryptocurrency is supported by its strength and potential as an investment asset. Bitcoin has proven its continued resilience and has emerged as a long-term store of value with high growth potential. The limited supply, decentralized nature and widespread adoption of Bitcoin by institutions and It has made it a preferred choice among retail investors.

Tapping the Bitcoin mining sector

In addition to increasing its Bitcoin holdings, Tether has also doubled down on plans to put more funds into Bitcoin mining as part of its expansion plans.

Last month, the company announced plans to allocate $500 million to Bitcoin mining operations over the next six months and announced a cash profit of over $3 billion.

This allocation will lead to the establishment of Tether's Bitcoin mining facilities and the investment of existing BTC mining enterprises. This recently included the provision of $609 million in debt financing to European bitcoin miner Northern Data Group as part of Tether's strategic initiatives.