Tether Netted $4.52 Billion Q1 Profit Thanks To Bitcoin Gains

tether It posted a record-breaking $4.52 billion profit in the first quarter. This is an unusually large sum even for a highly successful and dominant company. stable coin provider.

that’s right Q1 2024 Certification Report The company earned about $1 billion in net operating income from its holdings in U.S. Treasuries, the company announced Wednesday. These short-term securities make up the bulk of Tether’s reserves and back the $110 billion dollar-pegged stablecoin USDT.

However, the rest is likely due to significant price increases due to the rise in the value of the company’s Bitcoin (BTC) and gold reserves.compared to last quarterTether’s BTC holding size increased from $2.8 billion to $5.4 billion, and its gold position increased from $3.5 billion to $3.7 billion.

In the first quarter alone, over 12 billion new USDT tokens were issued.

“Tether reiterates its commitment to transparency, openness and conservative risk management by maintaining significant excess reserves and providing disclosure to the group,” Tether Chief Executive Officer (CEO) Paolo Ardoino wrote: twitter.

In May 2023, Tether announced that it had begun investing a portion of its operating profits in Bitcoin in an effort to diversify its portfolio. On-chain data The company currently has 75,300 BTC in its Bitcoin address, implying an increase from 66,400 BTC after purchases in early 2024.

Tether’s excess reserves now total $6.3 billion, an increase of nearly $1 billion from last quarter, which the company says provides a buffer against potential draws and risks related to its core reserve structure. . This more than covers the $4.7 billion worth of secured loans on its balance sheet, which the company was once widely criticized for relying on as part of its core reserves.

Unlike other stablecoin issuers like Circle, Tether has not yet undergone a formal audit, and Ardoino said the “big four” accounting firms (Deloitte, PwC, EY, KPMG) have audited it. They claim that this is because they consider it a reputational risk.in interview He said earlier this month that Tether was “trying to make a case” to “build relationships to get audited by the Big Four.”

Meanwhile, Tether’s quarterly “certified” reports reveal the state of its balance sheet as of a particular date, as certified by BDO, the world’s fifth largest multinational accounting network.

Cantor Fitzgerald CEO Howard Lutnick also backed Tether, claiming that the company has visibility into and controls much of the bond portfolio that backs Tether’s USDT token.

Since its certification date on March 31st, the price of Bitcoin has fallen from $71,000 to $57,300, likely reversing some of Tether’s first-quarter Bitcoin gains.

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