The Investment That Raises Eyebrows

Today I came across a post on X by trader @OzzyTraderJoe. He believes that the 37,229 BTC invested by Tether in Twenty One Capital were supposed to back USDT.

I’m not so sure about that. After all, custodial dollar stablecoins like USDT are usually backed by actual dollars, not Bitcoin. Most likely, these BTC were Tether’s own reserves - not user funds.

But that’s not even the main question on my mind. What puzzles me more is this: why did Tether choose to invest in BTC rather than using its own token, USDT?

If you hold both Bitcoin and USDT, which one would you spend and which would you hold onto? Personally, I’d part with USDT and keep the BTC. I suspect Tether would do the same.

Sure, I know some people prefer to swap their BTC for something more stable as soon as they get it. At rabbit.io, we see a lot of that - BTC to USDT is one of our most popular directions. I understand that mindset. But I doubt that Tether’s decision makers shares it. Their CEO regularly advocates for Bitcoin and calls Bitcoin the future of money.

So here’s my only theory: maybe Tether offered USDT, but it was turned down.

Anyone got a better explanation?