rewrite this title Tether Purchases $735 Million in Bitcoin in Q1 – Decrypt

Stablecoin issuer Tether Holdings purchased 8,888 Bitcoin in the first quarter, adding $735 million worth of the asset to its reserves on Tuesday alongside its latest attestation report.

The company managing Tether’s industry-leading footprint now controls $7.8 billion worth of Bitcoin, according to the blockchain data platform Arkham Intelligence. Three months ago, Tether padded its reserves with $777 million worth of Bitcoin.

Tether meanwhile reported record-breaking profits of $4.5 billion the first quarter, saying $1 billion flowed from massive holdings of U.S. Treasuries in a new attestation report.

The El Salvador-based firm said it now holds $90.87 billion worth of U.S. Treasuries, which mirrors Germany’s holdings of U.S. debt in early 2024, per U.S. Treasury Department data.

The remainder of Tether’s profits came from market-to-market gains on its Bitcoin and gold, the company said. Within the company’s reserves, which includes cash equivalents and other investments, Tether says it holds $5.4 billion worth of Bitcoin and $3.65 billion worth of gold.

The company said in May 2023 that it would allocate up to 15% of its net realized operating profits to the world’s largest cryptocurrency. At the time, its Bitcoin holdings were worth around $1.5 billion.

In the first quarter, the precious metal’s price set new records. Futures contracts for the precious metal also rose over 19%, marking the best quarterly stretch since 1986, per Barron’s.

Bitcoin’s price fell 12% over the same period, according to the crypto data provider CoinGlass, suggesting gold played a major part in what Tether says is a new high-water mark.

In addition to the stablecoin Tether, which has a total value of around $144 billion, the company issues Tether Gold, which is worth $780 million, according to CoinGecko. Tether Gold can be redeemed for actual gold, according to Tether’s website. 

For years, Tether has published attestation reports, while competitors and critics have consistently pointed out that they are not audited financial statements. Tether CEO Paolo Ardoino told Reuters this month that a full audit is the company’s top priority.

Stablecoins are digital assets pegged to the price of a fiat currency, such as the U.S. dollar. They are often backed by a mix of cash and U.S. Treasuries.

Tether’s record-breaking profits come as lawmakers debate stablecoin legislation on Capitol Hill, which may provide a pathway to legality for stablecoin issuers in the U.S. for the first time.

The bill could also force Tether, which is not based in the U.S., to comply with anti-money laundering rules, although U.S. House Majority Whip Tom Emmer (R-MN) is opposed to the move. Based on the bill’s draft language, JP Morgan analysts also think Tether may have to change the structure of reserves backing its leading stablecoin.

Those details could end up leading the debate among lawmakers on Wednesday, when the House Financial Services committee is set to mark up the so-called STABLE Act.

Edited by James Rubin