Tether, a stablecoin issuer, will begin buying bitcoins ( BTC ) using a part of its profits as of this month. This is part of an investment strategy that focuses on the biggest cryptocurrency by market cap.

Tether will purchase BTC with up to 15% of its realized investment profits, excluding unrealized price appreciations of reserve assets. The tokens will be added to the reserve surplus.

According to the company’s statement, it will take custody of the BTC stash itself, without using third-party custodians.

Tether’s 2023 Q1 a href=”https://tether.to/en/tethers-latest-q1-2023 assurance report shows reserves surplus at all time high of 244 billion dollars, up 148 billion in net profit, new categories for additional transparency, reveals bitcoin and gold allocations/”>attestation/a>. According to the 2023 Q1 attest, 85% of reserves are in cash or cash-like assets like U.S. Treasury Bonds.

Stablecoins are now worth $131 billion and have become an important building block in the cryptocurrency infrastructure. They facilitate trading and transactions by keeping the price of digital tokens anchored to a foreign asset, typically the U.S. Dollar.

BTC Investments

Press release: The BTC campaign is designed to diversify and strengthen the stablecoin reserve, as well as capitalize on the price appreciation of the BTC.

In a press release, Paolo Ardoino said that Bitcoin has consistently proven its resilience. It has also emerged as a store of long-term value with significant growth potential. “Our investment is not just a way of enhancing the performance of our stock portfolio. It is also a means of aligning ourselves to a transformative technilogy.”

The company stated that it will only use realized capital gains from its investments to buy BTC and ignore unrealized gains. The statement states that the company will only consider “the tangible gains” from its investment operations, which are the differences between the price of an asset and the net proceeds of a sale, or in the case of maturing assets like Treasury Bills, the difference between price of the asset and the amount reimbursed.

Tether also said that among its smaller investments, it focuses on communication systems, energy infrastructure and bitcoin mining.

Tether’s lack transparency regarding its reserves, and controversial investments have been criticised by the crypto industry.

USDC from Circle, the second-largest stablecoin, was hit by the U.S. banking crisis , which led to the USDT, the company’s flagship coin, becoming a haven. A part of USDC cash reserves were frozen by Silicon Valley Bank over the weekend. This had a knock-on impact on several stablecoins.

Tether emerged from the crisis as the clear winner, maintaining its price stability despite its perceived disconnect with U.S.-based banks due to being incorporated in British Virgin Islands and Hong Kong. USDT circulation is up 24% in 2018, while the majority of rivals have experienced significant withdrawals.

Read more: USDC outflows surpass $10B as Tether’s Stablecoin dominance reaches 22-month high

Parikshit Miishra is the editor.