An on-chain analyst has found a wallet where Tether stores its bitcoins
Date: 2023-08-06 Author: Karina Ziganova Categories: BUSINESS, IN WORLD
According to the Tether report for the second quarter, $1.67 billion worth of bitcoins are stored in the company's wallets - that is, about 55,000. BTC at the exchange rate on the day of the report. In the previous quarter, Tether's bitcoin balance fluctuated around $1.5 billion, which corresponds to approximately 53,490 BTC.
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Meanwhile, on-chain analyst Tom Wang of 21.co (the parent company of 21Shares) discovered a bitcoin wallet whose balance matches data from the USDT issuer's quarterly reports on investments in BTC.
The balance of this wallet grows every quarter. At the end of March, 53,490 BTC were accumulated on it, and at the end of June - 55,020 BTC. Moreover, receipts to this address come exclusively from the wallet of the Bitfinex crypto exchange and in amounts coincide with the purchases of the company. Given the close ties between these companies, the researcher considers this fact additional evidence in favor of his theory.
Wang's analysis suggests that Tether collects all of its BTC at one address. This is quite possible, assuming that the company accumulates bitcoin assets in cold storage, protected from online hackers.
Tether reserves
Earlier this year, the company announced that it would invest 15% of its realized net operating income in bitcoin. The company generates investment income from a large portfolio of US Treasury bonds, gold and other investments in traditional assets.
Unlike traditional banks that use a fractional reserve strategy, Tether backs USDT primarily in cash and short-term US Treasuries. At the time of writing, the yield on 1-month US bills is about 5.38%, while their share in the composition of Tether reserves reaches 64%.
The state of the company's reserves and USDT backing are often criticized by the crypto community because the company does not confirm their accuracy with independent audit reports. Recently, the head of the Binance crypto exchange compared Tether to a “black box”.
USDT Drawdown
Meanwhile, the USDT rate today fell to the level of $0.997. This is the lowest level since November 2022, when the stablecoin briefly sank to $0.994, triggering panic talk about decoupling from the dollar (or depeg).
This dynamic did not affect the USDT market position in any way. The stablecoin remains the largest in the market in terms of capitalization and average daily trading volume. More than $18 billion worth of USDT is circulating daily on the market. USDC is in second place, while its trading volume is nine times smaller and barely exceeds $2 billion.
