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This week, Binance CEO released the second quarter report early as he targeted the largest stablecoin. The company shared details of the audit conducted by BDO and stated that their earnings have significantly increased. Meanwhile, analyst Tom Wan made an important claim on his X (Twitter) account today.
How Much Bitcoin Does Tether Have?
Although Tether has not officially disclosed its bitcoin addresses, Tom Wan, a research analyst at 21CO, said that he discovered an address potentially owned by Tether which currently holds approximately 55,022 bitcoins worth about $1.6 billion.
A source familiar with the matter confirmed the accuracy of the claim and stated that the company is the 11th largest Bitcoin investor. Tether has not yet made a statement regarding the issue. The wallet balance matches the total Bitcoin stated in the company’s second quarter reserve report. In a previous announcement, Tether stated that it would use up to 15% of its profits to buy Bitcoin.
Is Tether Safe?
The idea of a company holding billions of dollars worth of Bitcoin reserves is not new. Do you remember when Terra collapsed last year? Research analysts said that although Bitcoin has been one of the best-performing assets in the past decade, investing excessively in cryptocurrency could pose risks given its highly volatile nature.
Tom Wan said the following about this:
“According to Tether’s statement, Bitcoin assets are of considerable size among Tether’s total assets. This situation brings risks as well as significant gains for Tether.”
On the other hand, what the company holds as collateral for the tokens it issues is largely treasury bonds. Therefore, it should not pose a problem with regards to the BTC that it has accumulated with a portion of its profits. However, the $1.6 billion detail should not be overlooked. Since the company has not generated more than $10 billion in revenue since announcing that it would make purchases up to 15%, there is a significant amount of collateral for the tokens issued.
Tether is criticized for not publishing appropriate audits of its reserves, as it only releases attestations. Earlier this week, Changpeng Zhao, co-founder and CEO of Binance, referred to Tether as a “black box” during an “ask me anything” session because it has not published official audit reports. Tether CTO Paolo Ardoino previously stated that “no stablecoin has an official audit, only attestations.”
