Tether Buys 8,888 Bitcoin (BTC): A Strategic Move or a Risky Bet?

Updated on Apr 1, 2025 at 12:19 pm UTC by · 4 mins read

In the first quarter of 2025, USDT issuer Tether has scooped up a massive 8,888 Bitcoin (BTC) worth a whopping $735 million. 

Tether, the issuer of the USDT USDT $1.00 24h volatility: 0.0% Market cap: $144.00 B Vol. 24h: $50.87 B stablecoin, has strengthened its Bitcoin BTC $81 891 24h volatility: 3.6% Market cap: $1.63 T Vol. 24h: $51.87 B holdings with a significant $735 million purchase in the first quarter of 2025.

The acquisition of 8,888 BTC has positioned the company as the sixth-largest Bitcoin holder globally, bringing its total Bitcoin reserves to 92,647 BTC, valued at approximately $7.64 billion at current market prices.

Meanwhile historically, Tether’s reserves have been backed by cash, short-term securities, and other traditional financial assets to maintain liquidity. The inclusion of Bitcoin could put USDT at a risk.

Tether’s Strategic Bitcoin Accumulation

The purchase aligns with Tether’s long-term strategy of allocating 15% of its net realized operating profits each quarter to Bitcoin acquisitions.

This plan was initially announced in May 2023, with the asset being gradually accumulated throughout each quarter and settled at the end.

Despite Bitcoin’s 12% decline in Q1 2025, the worst quarterly performance in seven years, Tether remained committed to its investment approach.

Arkham Intelligence data confirms that Tether withdrew the 8,888 BTC from a Bitfinex hot wallet. The firm’s reserve wallet now holds approximately $7.65 billion worth of Bitcoin.

Such withdrawals from exchange hot wallets to private addresses are often seen as a bullish signal, as they reduce selling pressure in the short term by removing Bitcoin from the market’s immediate liquidity.

Bitcoin Reacts to Tether’s Purchase

Tether’s latest Bitcoin purchase coincided with notable market movement for Bitcoin as it rose above $84,000 after dipping to a daily low of $81,314.21, witnessing a 4% gain in 24 hours.

This uptrend followed over $226.91 million in liquidations over the past 24 hours, which includes $147.45 million worth of BTC shorts, shows CoinGlass data.

Tether’s purchase came shortly after MicroStrategy, now rebranded as Strategy, announced an additional Bitcoin acquisition.

On March 31, Strategy added 22,048 BTC worth $1.92 billion to its corporate treasury, purchased at an average price of $86,969 per coin. Strategy’s total Bitcoin holdings now amount to 528,185 BTC.

Could BTC’s Volatility Undermine USDT’s Stability?

While Tether’s Bitcoin accumulation strategy signals institutional confidence in the asset, it also raises concerns about the stability of USDT.

USDT’s primary function is to maintain a 1:1 peg with the US dollar, ensuring stability within the crypto market. However, increasing exposure to Bitcoin, a highly volatile asset, could introduce risks to USDT’s peg.

If a significant portion of Tether’s reserves becomes tied to Bitcoin’s fluctuating value, USDT’s ability to maintain its dollar peg could be compromised.

In extreme scenarios, a steep decline in Bitcoin’s price could impact Tether’s balance sheet, leading to potential liquidity concerns.

If Tether’s Bitcoin-heavy reserves raise doubts about its ability to honor redemptions at scale, it could diminish trust in USDT’s stability and dominance in the stablecoin market.

This could create opportunities for rival stablecoins, such as USDC, DAI, and even RLUSD to gain market share at Tether’s expense.

Share:

Related Articles

Bitcoin ETFs Saw $220M in Inflows Despite BlackRock’s Selloff, Trump’s Tariff War

By April 3rd, 2025

US-based spot Bitcoin exchange-traded funds recorded an impressive surge in inflows while the leading product saw $116 million in outflows amid the United States tariff war.

GameStop’s $1.5B Bet on Bitcoin Pushes GME Stock Price

By April 2nd, 2025

GameStop’s latest fundraising brought its stock to the green zone as the video game retailer wants Bitcoin exposure.

Bitcoin Price Reclaims $84,000, Here Are Key Levels to Watch

By April 1st, 2025

Bitcoin price rebounds above $84K as selling slows. Traders eye $86K resistance and $78K support for the next move.

Exit mobile version