top of page

Big Players Bet Big on Bitcoin: Tether and MicroStrategy Lead the Charge with Major Acquisitions

Stablecoin Leader Tether and Software Developer MicroStrategy Solidify their Positions in the Crypto Arena, Amassing Bitcoin Reserves in Excess of Millions Amidst Soaring Market Interest.

In the ever-evolving world of cryptocurrencies, some major players have been making significant moves when it comes to acquiring Bitcoin. Tether, the issuer of the widely-used USDT stablecoin, recently reported an astounding $3.3 billion in excess reserves during the second quarter of this year. This indicates the company's commitment to backing the value of its stablecoins with substantial reserve assets. The attestation, signed by reputable accounting firm BDO Italy, disclosed exposure to approximately $72.5 billion in U.S. Treasuries, including direct T-bill investments, repurchase agreements, and deposits in money market funds.


Tether's financial performance has been remarkable, with operational profits exceeding an impressive $1 billion in Q2 alone. In the previous quarter, the firm reported net profits of $1.45 billion. The issuer is responsible for the circulation of over $83 billion worth of USDT, making it the largest stablecoin by market capitalization and a critical component of the crypto ecosystem for facilitating trading and asset transfers.


One of the driving factors behind Tether's profitability is the issuance of fiat-backed dollar-pegged stablecoins, which has proven to be a lucrative business, especially given the rising U.S. government bond yields. Tether's reported profits are comparable to those of BlackRock, a leading asset management giant with over $9 trillion in assets under management, which booked operating income of just over $1.6 billion in Q2.


However, despite its financial success, Tether has been facing increased scrutiny due to concerns surrounding its opaque reserve management and the lack of independent audits. Critics argue that attestations may not provide a comprehensive financial analysis of the company's reserves and operations.

Interestingly, Tether's interest in cryptocurrencies goes beyond its stablecoin operations. The company has been making significant moves in the Bitcoin market as well. Tether recently disclosed that it acquired $176 million worth of Bitcoin since March. Notably, the company added 2,310 Bitcoins to its holdings during Q2, increasing its total Bitcoin holdings from 52,698 in Q1 to an impressive 55,008. This indicates Tether's confidence in the long-term potential of the leading cryptocurrency.


Tether isn't the only major player making bold Bitcoin purchases. MicroStrategy, a software developer, has also made headlines with its significant BTC accumulation. The company has amassed a massive Bitcoin stash over the years, and it now plans to raise up to $750 million by selling more stock. The proceeds from this offering are earmarked for further Bitcoin acquisitions, among other uses.

In July, MicroStrategy made yet another substantial Bitcoin purchase, acquiring an additional 467 BTC for a total of $14.4 million. This move further solidified MicroStrategy's position as one of the largest institutional holders of the cryptocurrency. With this latest purchase, the company now holds an impressive 152,800 BTC in its treasury. The news of MicroStrategy's potential stock sale and its intention to buy more Bitcoin caused a notable surge in the price of the cryptocurrency. Bitcoin's value rose from around $29,200 to approximately $29,800 following the announcement, highlighting the influence of major players on the digital asset's market.


MicroStrategy's Chairman, Michael Saylor, has been a vocal advocate of Bitcoin and has spearheaded the company's deep involvement in the cryptocurrency. To fund previous Bitcoin purchases, Saylor has resorted to selling portions of the publicly traded company's equity and bonds. This latest move aligns with the company's strategy of using its available resources to accumulate more Bitcoin.


In conclusion, the recent developments surrounding Tether and MicroStrategy exemplify the growing confidence of big players in Bitcoin and the broader crypto market. Tether's substantial reserves and consistent profits reinforce the stablecoin's importance in facilitating crypto trading and the growing adoption of cryptocurrencies. On the other hand, MicroStrategy's continuous pursuit of Bitcoin acquisitions demonstrates its belief in the digital asset as a robust long-term investment. As more major players continue to enter the crypto space, their actions will undoubtedly shape the future of the industry. However, as with any investment, risks and uncertainties remain, making it crucial for investors to exercise due diligence and caution.

Comments


bottom of page