What happened?
On September 30 blockchain data showed Tether moved 8,888.889 BTC — roughly $1 billion — into a reserve wallet. The coins were sent from a Bitfinex hot wallet and Tether CEO Paolo Ardoino gave a brief confirmation. This fits Tether’s 2023 plan to use up to 15% of quarterly net profits to buy Bitcoin, bringing its holdings to around 109,410 BTC (about $12 billion).
Who does this affect?
USDT holders are indirectly exposed because part of Tether’s backing now includes volatile Bitcoin. Bitcoin traders and liquidity providers may see programmatic buying or potential selling pressure during stress events, which can move markets at the margins. Regulators and other stablecoin issuers also pay attention since this blurs the line between stable reserves and risky assets.
Why does this matter?
Programmatic Bitcoin purchases by a major issuer add steady demand that can help support Bitcoin’s price, at least at the margins. But holding Bitcoin in reserves increases the risk that redemptions force sales during downturns, potentially amplifying volatility and challenging the USDT peg. The move could change industry reserve practices and draw more regulatory scrutiny, affecting market transparency and stability.