Is This The Actual Reason That Tether Is Acquiring BTC?

Tether, the creator of USDT, is amassing Bitcoin in 2025. Is this a tactical decision to safeguard against a possible USDT depeg? In 2021, USDC experienced a depeg and struggled to reestablish the peg right away because banks were not open.

The largest multichain stablecoin by crypto market capitalization has been diligently acquiring Bitcoin in recent months.

Tether Accumulating Bitcoin: A Tactical Strategy?

As per Arkham data, in Q1 2025, Tether, which has also invested in BTC mining ventures in Paraguay, acquired 8,888 Bitcoin, increasing its total to 100,521 BTC.

(Source)

At this rate, Tether, a private enterprise whose shares are not publicly traded, is positioned among the top BTC holders, just behind Strategy (previously MicroStrategy). Yet, it possesses more Bitcoin than Tesla.

This significant accumulation of Bitcoin is why some individuals on X believe that the strategy might be advantageous for the USDT issuer in the event of a depeg.

Will Tether Liquidate BTC If USDT Depegs?

In a post, an analyst remarked that the move to build up Bitcoin is “something that is not fully appreciated.”

Something that’s often overlooked regarding Tether is that should USDT temporarily go off-peg (similar to what occurred with USDC), they have $7.8 billion in Bitcoin available instantly to uphold the peg

Whereas Circle has all its funds in banks, making the time to re-establish parity potentially much longer (due to transfer delays)

— 0xngmi (@0xngmi) April 2, 2025

If USDT, which currently enjoys a market capitalization exceeding $144 billion, were to depeg, Tether could swiftly sell some of its Bitcoin at current prices to restore the peg without holdups.

He refers to the USDC depeg of March 2023, during which Circle had to wait two days for banks to reopen before parity was reestablished.

In contrast to its rival, the analyst believes that Tether could offload part of its BTC reserves to rectify a depeg without triggering panic within the crypto trading sphere.

However, until a depeg event transpires—like post-Terra collapse in 2022 when USDT momentarily dipped to $0.96 or during the FTX collapse that drove USDT to $0.971—it remains uncertain if Tether would utilize Bitcoin as its primary tactic.

The Tether Bitcoin Reserve

Tether asserts that every USDT in existence is backed by cash and other liquid assets, such as holdings in U.S. Treasuries. However, there has been no formal audit to verify the assets contained in its reserves. It is also possible that they might be harboring some of the top meme coins for investment in 2025.

From the Tether Transparency page, the issuer claims 82.35% of its reserves consist of cash and cash equivalents, including short-term U.S. Treasuries. Secured loans account for 5.7% of the overall reserve, with BTC making up 5.47%.

(Source)

At present, if USDT were to depeg, Tether might first liquidate its Treasuries before considering selling BTC. This sequence is due to Treasuries being more liquid compared to Bitcoin.

Conversely, unloading Bitcoin during a crisis could further destabilize the crypto market, worsening the situation and potentially leading to additional market fluidity challenges within the crypto sector.

Is Bitcoin The Solution?

Nonetheless, Tether remains focused on accumulating Bitcoin, which is generally less liquid and more volatile than Treasuries. It is probable that they view Bitcoin as a long-term investment rather than a quick liquidity fallback, securing its status as one of the premier cryptocurrencies to consider.

This strategy is also forward-thinking. With U.S. authorities emphasizing the establishment of comprehensive stablecoin regulations and a crypto and BTC reserve, Tether is positioning itself in alignment with pivotal changes.

Such an approach will persist even amid JPMorgan’s assertions that certain elements of Tether’s reserves may encompass non-compliant assets like precious metals and corporate bonds.

JPM analysts are frustrated because they lack Bitcoin.

— Paolo Ardoino (@paoloardoino) February 13, 2025

In reaction, Tether downplayed these apprehensions, asserting that JP Morgan is “upset” and lacking sufficient Bitcoin.

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The article Is This The True Reason Behind Tether’s Bitcoin Purchases? first appeared on 99Bitcoins.