Tether Acquires 8,888 Bitcoin for $735 Million in Q1 2025
Tether's Bitcoin Acquisition Overview
- Tether purchased 8,888 BTC for $735 million in Q1 2025.
- This acquisition made Tether the sixth-largest Bitcoin holder globally with 92,647 BTC valued at approximately $7.64 billion.
- Historically, Tether's reserves included cash and traditional assets, now augmented by Bitcoin, which may introduce risks to USDT.
Strategic Investment Approach
- Tether plans to allocate 15% of its quarterly net realized profits to Bitcoin purchases, a strategy announced in May 2023.
- The most recent Bitcoin purchase occurred despite a 12% decline in Bitcoin's price during the same quarter.
- Withdrawals from exchange wallets to private addresses are viewed as bullish, reducing immediate market liquidity.
Market Reactions
- Bitcoin's price rose above $84,000 after dipping, reflecting a 4% increase within 24 hours.
- $226.91 million in liquidations occurred, including $147.45 million in BTC shorts, indicating increased market volatility.
- MicroStrategy acquired an additional 22,048 BTC for around $1.92 billion shortly before Tether's purchase.
Concerns About USDT Stability
- Tether's strategy raises concerns regarding USDT’s ability to maintain its 1:1 peg with the US dollar due to increased Bitcoin exposure.
- A significant decline in Bitcoin prices could jeopardize Tether's balance sheet and liquidity.
- Increased Bitcoin holdings may lead to diminished trust in USDT, allowing rival stablecoins like USDC and DAI to capture market share.