Tether Reports Record Profits: Breaking Down USDT Reserves 

Tether’s record-breaking Q1 earnings and increased U.S. Treasury holdings, and their impact on USDT and the broader cryptocurrency landscape.

Man feeling powerful with Tether.
Created by Kornelija Poderskytė from DailyCoin
  • Tether reports a Q1 net profit of $4.52 billion.
  • Gains come from treasury holdings and Bitcoin and Gold.
  • Treasuries enable Tether to make substantial profits. 

Tether Holdings Limited, the issuer of USDT, the biggest stablecoin in the world, had often found itself in controversy. These largely stemmed from the transparency of its reserves, which often came under question. 

Since then, Tether has started to take transparency more seriously. Its latest report breaks down the company’s assets, including its significant profits. 

Where do Tether’s Profits Come From? 

On Wednesday, May 1, Tether Holdings Limited released its financial report for the first quarter of 2024, showing a record net profit of $4.52 billion. According to the attestation by the accounting firm BDO, the largest share, $1 billion, came from US Treasuries. 

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The remainder came from the increase in the value of Bitcoin and gold, which Tether owns in large quantities. At the beginning of the year, Bitcoin’s price was $42,280 and has since shot up significantly. Currently, Bitcoin is trading at $57,329. Moreover, gold has significantly increased over the same period, going from $2070 per ounce to $2300. 

A chart breaking down Tether's reserves.
Source: Tether

Tether’s considerable Bitcoin and gold holdings contributed substantially to its profits. According to the attestation, Tether’s total reserves are $115.41 billion, with the largest portion, $90.87 billion, in U.S. Treasuries. 

Why Tether Holds So Much Bonds

Tether’s bonds offer a liquid asset that is easily convertible to cash, enabling the company to meet eventual withdrawal demands. However, unlike cash reserves, US Treasury bonds provide a return on investment. This means Tether can profitably from them while exposing itself to relatively little risk.  

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In addition to bonds, Tether holds $1.83 billion in cash and cash equivalents. These are highly liquid assets that fulfill immediate redemption requirements. 

In addition to treasury bonds and cash, Tether also holds $5.37 billion in Bitcoin and $3.65 billion in Gold. Notably, Tether issues a gold-backed stablecoin, which explains its substantial gold holdings. 

On the Flipside

  • Despite Tether’s reports, questions about its reserve transparency still persist among the crypto community. 
  • Tether has recently been expanding beyond stablecoins, including into venture capital, big data, and AI. 

Why This Matters

Tether’s recent financial outcomes and the management of its reserves have broad implications for the cryptocurrency market, particularly affecting perceptions of USDT’s stability and reliability.

Read more about Tether’s controversies: 
Tether (USDT): A Giant With Feet of Clay?

Read more about Solana’s latest performance: 
Solana Sees Momentum Dwindle as Updates Fail to Fix Congestion

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
David Marsanic

David Marsanic is a journalist for DailyCoin who covers the intersection of crypto, traditional finance, and government. He focuses on institutionalized crypto entities like major cryptocurrency exchanges and Solana, breaking down complex topics into easy-to-understand writing. David's prior experience as a business journalist at various crypto and traditional news sites has enabled him to maintain a critical approach to news while adhering to high journalistic integrity standards.