Tether Set to Beat MicroStrategy, Purchases 52,670 Bitcoin in Q1

Tether Holdings, the issuer of the USDT stablecoin recently revealed in its Q1 2023 report that it had purchased 52,670 Bitcoin with extra reserves, in its bid to catch up to MicroStrategy.

Notably, Tether’s purchase of 52,670 Bitcoin is worth approximately $1.4 billion at the current market price. This is a significant investment that reflects Tether’s optimism about Bitcoin’s future possibilities.

Is Tether on Track to Overtake MicroStrategy?

Following the update, some experts are of the opinion that the move has set Tether on the path to outpace MicroStrategy, which has been one of Bitcoin’s most famous institutional buyers.

Specifically, the CEO of JAN3, Samson Mow highlighted that Tether might reach a base of roughly 200,000 coins per year, if it maintains its current accumulation and pace, perhaps beating MicroStrategy.

Remarkably, MicroStrategy has a Bitcoin holding of approximately 140,000 valued at $4 billion by the current market value. However, Tether’s recent acquisition has given it a great chance to rank among the top institutional Bitcoin holders. 

This is an important step for the crypto market since it demonstrates that institutional investors still think highly of Bitcoin as a long-term investment.

How Do Rising Interest Rates Benefit Tether?

Meanwhile, Tether has reportedly recorded Q1 profits of almost $1.5 billion despite rising interest rates. The financial analyst known on Twitter as ‘girevik’ explained that Tether generates revenue by earning interest on US Treasury bonds while paying depositors 0%. As a result, rising interest rates benefit Tether.

Girevik basically concluded that the Fed and US Treasury are financing Tether’s Bitcoin acquisitions.  He also mentioned that despite having the chance to earn 5% risk-free in a bank, investors still prefer to invest in digital currencies outside of the banking system.

Impact of Tether’s BTC Purchase on the Price of Bitcoin

At the moment, it remains to be seen how Tether’s investment has affected the overall Bitcoin market, but it is likely that it will provide a boost to Bitcoin’s price in the short term. 

Overall, the influence of Tether’s Bitcoin purchase on the asset’s price will be determined by a variety of factors, including market circumstances, supply and demand dynamics, and general investor attitude.

Tether Increases Profit Despite Industry Challenges

Interestingly, Tether earned approximately $700 million in profit at the end of last year, despite the massive damage that the crypto industry took last year, as well as the bankruptcy of some crypto exchanges.