Tether’s Bitcoin bet puts it in competition with MicroStrategy, has potential to cause market volatility

Tether, the company behind the world’s largest stablecoin, announced this week that it would begin regularly purchasing Bitcoin. The company plans on allocating up to 15% of its monthly net realized operating profits for Bitcoin purchases.

While Tether has previously purchased BTC and kept it separate from its excess reserves, this is the first time the company has announced a long-term strategy regarding Bitcoin. This is also the first time a large crypto company shared plans for recurring, monthly BTC investments.

Tether’s announcement came on the heels of its attestation report for the year’s first quarter, published on May 10. The assurance opinion, breaking down the assets held by Tether Holdings, was completed by BDO Italia, an independent public accounting firm. Unlike previous assurance opinions, the latest one provided more transparency into Tether’s reserves, adding separate categories for Bitcoin, physical gold, corporate bonds, and overnight repo.

This increased transparency into Tether’s reserves caused a stir in the crypto industry, with traders and analysts arguing over the implications of the company’s Bitcoin purchases and its exposure to U.S. Treasurys.

In this report, CryptoSlate dives deep into Tether’s Bitcoin bet and the implications it could have on the market.