Tether posts record Q1 profits as USDT keeps growing

Friday, May 3, 2024 6:18 a.m.

The second quarter of 2024 was off to a rocky start for cryptocurrencies. Currently down about 20% from Bitcoin’s highs of $73,700, the market has been battered by things like the threat of World War III, persistent inflation in the US, and an onslaught from the US government. is recieving. One crypto company in particular will miss the first quarter after just announcing details of its incredible performance.

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The second quarter of 2024 was off to a rocky start for cryptocurrencies. Currently down about 20% from Bitcoin’s highs of $73,700, the market has been battered by things like the threat of World War III, persistent inflation in the US, and an onslaught from the US government. is recieving. One crypto company in particular will miss the first quarter after just announcing details of its incredible performance.

On Wednesday, stablecoin issuer Tether announced earnings details for the first quarter of 2024. The quarter was its most profitable quarter ever, with net income of $4.52 billion. This is an increase of nearly 60% compared to the previous record total of $2.85 billion in the fourth quarter of 2023. Additionally, the total supply of their stablecoin USDT has reached a record high of $110 billion.

Tether’s business model is based on users depositing fiat currency and receiving USDT in exchange for investing in cryptocurrencies. Tether invests fiat deposits primarily in short-term U.S. Treasury securities. For example, the yield on three-month U.S. Treasuries is currently around 5.4%. Stablecoin issuers report that direct and indirect holdings in the U.S. Treasury have reached a record high of over $90 billion. These generated approximately $1 billion in revenue in the first quarter. Ryan Serkis of Messari Crypto estimates Tether has about 50 employees. First quarter profits of $4.52 billion make Tether one of the companies with the highest profits per employee globally.

During the first quarter, conditions were ideal for Tether. Demand for stablecoins has increased with higher US Treasury yields and rising prices of Bitcoin and gold. They are currently one of the largest holders of Bitcoin, holding over 75,000 Bitcoins worth $4.3 billion. Their gold holdings are also worth $3.8 billion. His nearly 69% rise in Bitcoin and his 8% rise in gold account for the rest of the quarter’s roughly $3.5 billion in gains.

Previously, Tether said it could allocate up to 15% of its profits to buying Bitcoin in addition to gold. With this, they bought 8,888 Bitcoins in the first quarter. However, if Tether chooses to allocate 15% of its $4.52 billion first-quarter profit to Bitcoin, it could generate an additional $678 million in buying pressure by July. For Tether, another record quarter would require record Bitcoin prices. But they also invest their profits in AI and biotech. Their latest investment is his $200 million investment in BlackRock Neurotech. The company develops tools to help with paralysis and neurological disorders.

Stablecoins may not seem very exciting compared to other token and crypto businesses, but Tether’s incredible scale and diversified investments make stablecoins one of the most profitable in the world. It shows what a business can do.

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