• Tether has announced that it will regularly allocate up to 15% of its monthly earnings towards the purchase of Bitcoin.
• According to CoinShares, large one-off purchases such as those made by Tether can affect BTC prices positively.
• Tether’s market share of BTC volumes recovered after taking a hit in 2022.

Tether’s Investment Strategy

Tether, a stablecoin issuer, has recently announced an investment strategy where it would allocate up to 15% of its monthly profits towards the purchase of Bitcoin [BTC]. This move was expected to give a boost to BTC prices, according to digital asset Manager CoinShares. The company said that starting May, it would regularly allocate up to $75 million per month towards the purchase of BTC.

Impact on Bitcoin Prices

CoinShares stated that large one-off purchases such as those made by Tether invariably affect the price positively. Furthermore, data from Coinshares Fund Flows report shows that there was a 2.3% weekly price increase whenever weekly fund inflows were in the range of $10-20 million. On more than 60% of the occasions, prices rose with this sort of investment activity.

Tether’s Market Share Recovery

Tether’s market share of BTC volumes also recovered after taking a hit in 2022 due to Binance’s zero fees policy at the time. With USDT making a blockbuster run in 2023 and its market cap reaching $82.85 billion – making it the third largest cryptocurrency – things seem positive for Tether going forward.

Conclusion

It remains unclear whether or not and how much BTC will stand to gain from Tether’s planned purchase; however, this investment strategy is likely to provide some support for the king coin in terms of price hike expectations and further cementing Tether’s position as one of the top cryptocurrencies out there.