Tether Shatters Profit Records: Inside the Stablecoin Giant’s $4.52 Billion Quarter

Tether, a leading stablecoin provider, Reported a staggering profit of $4.52 billion The first quarter of 2024 broke the previous record. The company’s impressive financial performance can be attributed to a combination of large U.S. Treasury holdings and significant growth in Bitcoin and gold reserves.


TLDR

  • Tether reported record profits of $4.52 billion in the first quarter of 2024.
  • The bulk of the profits, about $1 billion, came from Tether’s holdings in U.S. Treasuries, which back the stablecoin USDT.
  • The remaining gains can be attributed to Tether’s significant increase in Bitcoin and gold reserves.
  • Tether’s Bitcoin holdings increased from $2.8 billion to $5.4 billion, and its gold position increased from $3.5 billion to $3.7 billion.
  • The company’s excess reserves currently total $6.3 billion, providing a cushion against potential draws and risks.

According to Tether’s 2024 Q1 Certification Report released on Wednesday, the company earned about $1 billion in net operating income from its holdings in U.S. Treasuries.

These short-term Treasury bills make up the bulk of Tether’s reserves and back the $110 billion dollar-pegged stablecoin USDT.

Visualization of reserves as of March 31, 2024; sauce.

In the first quarter alone, over 12 billion new USDT tokens were issued, reflecting the growing popularity of stablecoins.

However, a large part of Tether’s record profits can be attributed to the significant appreciation in the value of its Bitcoin and gold holdings.

Compared to the previous quarter, the size of Tether’s Bitcoin reserves jumped from $2.8 billion to $5.4 billion, and its gold position increased from $3.5 billion to $3.7 billion. These mark-to-market gains contributed significantly to the company’s overall financial success.

Tether CEO Paolo Ardoino on Twitter emphasized the company’s commitment to transparency, openness, and conservative risk management.

He noted that Tether maintains significant excess reserves and provides disclosures to the group.

The company’s excess reserves now total $6.3 billion, an increase of nearly $1 billion from the previous quarter. These reserves act as a cushion against potential drawdowns and risks associated with Tether’s core reserve structure and fully cover the $4.7 billion worth of collateralized loans on its balance sheet.

Despite its impressive financial performance, Tether has yet to be formally audited by one of the “big four” accounting firms.

Mr Ardoino claimed this was due to the perceived reputational risks associated with the company. But he said Tether is working to build relationships with these companies so that it can be audited in the future.

Meanwhile, Tether’s quarterly “certificate” report, certified by BDO, provides insight into the company’s financial health.

The reports have drawn support from some of the biggest names in the financial industry, including Cantor Fitzgerald CEO Howard Lutnick, who backed Tether’s claims about its bond portfolio.

Tether continues to expand beyond stablecoins, launching new initiatives in data, blockchain-based financial infrastructure, mining and energy, and the company’s record profits in the first quarter of 2024 The company has proven its strong financial position and ability to steer the company. The ever-evolving landscape of cryptocurrencies.

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