Tether will optimize its asset allocation. It plans to invest up to 15% of its funds in cryptocurrencies Bitcoin and other blockchain assets. Compared with the previous 100% cash and cash equivalents investment portfolio, this change is significant. It will directly increase Tether's revenue and boost the price of cryptocurrencies, while also facing some controversy and risks.
According to the released plan, Tether will use no more than 15% of its cash and cash equivalents to invest, with Bitcoin as the key asset. This move aims to increase the profit of Tether's issuing company and promote the rise of cryptocurrency market prices. As an important stablecoin in the cryptocurrency and blockchain industry, how to balance commercial benefits and market influence has always been one of the industry's key focuses.
The plan is somewhat controversial. On the one hand, as a stablecoin, it needs to maintain a 1:1 peg to fiat currency, and investing in cryptocurrencies faces the risk of price fluctuations. On the other hand, this may also trigger an encryption bubble. However, moderate asset allocation also benefits Tether's operations and reduces single risks. Tether claims that it will properly adjust the plan and asset ratio according to market conditions, while the market also needs to closely track its price changes and provide feedback.
While the industry is thriving, we also need to remain vigilant. The prices of cryptocurrencies are easy to rise but difficult to fall. Once there are violent fluctuations, it will seriously affect stablecoins and the market. As the cornerstone of the industry, stablecoins should not only seek their own commercial interests but also consider their impact on the market. Tether needs to tightly control risks while maintaining its own operations to avoid excessive impact. The entire industry should also closely follow the plan, market changes, and provide valuable suggestions to jointly promote healthy development.