Tether, the dominant player in the stablecoin market, plans to invest heavily in startups and projects over the next year. The company’s investment arm, Tether Investments, expects to allocate more than $1 billion for deals, according to a recent report from Bloomberg.
The company aims to expand its distribution network and support AI capabilities for partnered companies, promoting less reliance on big tech giants.
Tether Investments is particularly interested in alternative financial infrastructure for developing economies, artificial intelligence (AI), and biotechnology. As reported, it has invested around $2 billion in these areas over the past two years.
A Growing Company
Tether sees AI as a key area and aims to offer AI computing resources to partnered firms. Its investment strategy targets technology support that reduces reliance on major tech companies like Google, Amazon, and Microsoft.
“We can offer AI computing to all the companies we have invested in,” stated Tether CEO Paolo Ardoino, “It’s all about investing in technology that helps with disintermediation with traditional finance. Less reliance on the big tech companies like Google, Amazon and Microsoft.”
Tether shared that it plans to maintain 100% USDT reserves with a 6% buffer for smooth redemption while investing a portion of the remaining profits.
Tether is expanding beyond the stablecoin business to include other emerging markets, such as power and data. Last year, the company revealed its investment in Bitcoin mining. Bloomberg reported that Tether had spent $500 million building its mining facility.
Last month, Tether announced it had invested $150 million in Bitdeer, a Bitcoin mining company. The fund will be used for expanding Bitdeer’s data centers, developing ASIC mining rigs, and general corporate purposes and working capital.
Earlier in March, the firm said it started exploring AI opportunities. Following this announcement, the firm launched four separate departments for data, finance, power (mining), and education. The new divisions aim to support the company’s new focus: create accessible financial products and services using blockchain technology.
Tether believes these new ventures will create a sustainable, accessible, and empowering financial and technological ecosystem for everyone.
In addition, Ardoino plans to launch a non-custodial, multi-chain, and multi-asset tokenization platform to facilitate broader participation in the digital asset space.
Tether Reports Quarterly Profits
Since its inception, Tether has been surrounded by controversies and scrutiny. There were questions about the transparency of its reserves after it severed ties with its auditing firm in 2017.
In 2019, the New York Attorney General’s office accused Tether Limited and Bitfinex of using their cryptocurrency to manipulate the cryptocurrency market, alleging that Tether used to cover up the loss of $850 million.
In 2021, Tether and Bitfinex settled with the Attorney General’s office, paying an $18.5 million fine and submitting regular financial reports.
Tether has also received criticism from some crypto industry figures, including Ripple CEO Brad Garlinghouse. According to him, Tether would still be under U.S. regulatory scrutiny. He expressed concerns that the market would suffer if the regulators launched legal action against the stablecoin leader.
Despite past concerns, USDT has maintained its 1:1 value with the dollar. Tether has also maintained its position as the most used stablecoin in the cryptocurrency market. USDT consistently has the highest trading volume and market capitalization among stablecoins.
This stability makes it a popular choice for traders and individuals who want to mitigate the volatility of other cryptocurrencies. As of June 11, USDT’s market capitalization has surpassed $110 billion, according to data from CoinGecko.
Tether recently reported a remarkable profit of $4.52 billion in Q1 2024. This success has attracted numerous investment proposals, but only a small percentage have made the cut. With its USDT as the default USD proxy in the crypto space, the company is primed to grow.
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