• Tether announced that it would regularly allocate up to 15% of its monthly earnings towards the purchase of Bitcoin.
• Coinshares stated that these one-off purchases by Tether can have an effect on the price of BTC.
• According to data, there was a 2.3% weekly price increase whenever weekly fund inflows were in the range of $10-20 million.
Tether’s Investment in Bitcoin
Stablecoin issuer Tether has announced an investment strategy to purchase Bitcoin from its realized profit, which could boost the price of BTC according to digital asset Manager CoinShares. As part of this approach, 15% of Tether’s monthly earnings will be allocated towards buying BTC.
CoinShares‘ Fund Flows Report
CoinShares’ research suggests that when weekly fund inflows are between $10 and $20 million, there is a 2.3% weekly increase in prices. This indicates that large one-off purchases such as those made by Tether can affect the price significantly.
Tether’s Market Share
Analysis shows that after taking a hit in 2022, Tether’s market share for BTC volumes is now recovering indicating profitability and sustainability for future monthly purchases of BTC.
The magnitude of impact from these investments however remains unclear since $75 million is insignificant compared to BTC’s monthly trading figures which go into trillions and half a trillion dollars.
Overall, while it remains uncertain how much impact this investment strategy will have on the price of BTC, there is potential evidence that supports the theory that it could have some positive effects on the king coin in terms of market capitalization and increased value over time.