Tether Posts $2.85 Billion in Profit in Q4 2023

As we are well into 2024, several crypto companies are reporting their performance from the previous year—the good, the bad, and the ugly.

However, it’s only been the best for Tether Holdings Ltd., the company behind the largest stablecoin in the crypto market—USDt.

The stablecoin issuer has posted $2.85 billion in profit in the fourth quarter of 2023 (Q4 2023).

Now, you may ask what a stablecoin is.

In simple words, a stablecoin is a cryptocurrency the value of which is pegged to that of another asset such as a national currency or gold.

USDt, for example, is pegged to the US Dollar.

The peg helps keep its value stable; hence, the name stablecoin.

Imagine a cryptocurrency being stable!

But that’s exactly what a stablecoin is: a stable, non-volatile cryptocurrency.

Now back to record breaking net-profits... Tether credits this growth 2 main factors.

1. Surging interest in U.S. Treasuries, and
2. The appreciation of Gold and Bitcoin (BTC) reserves.

U.S. Treasuries are sold by the government of the United States to fund its expenditure. Meanwhile, gold is among the most precious metals that has been commercially traded for long.

Both of these assets are very trusted and reliable in the global market.

Thanks to the public listing of spot Bitcoin ETFs, the value of the king coin has also been soaring for a few months now.

The surge in the value of both the traditional and virtual assets Tether has accumulated is behind the remarkably high profit achieved by the company.

For 2023, the stablecoin issuer has posted a remarkable net profit of $6.2 billion.

• U.S. Treasuries, Reverse Repo and Money market funds generated operating profits of nearly $4 billion.

• The rest of the profit, i.e. 2.2 billion, was generated through other asset classes.

As per the latest report, Tether holds:

• U.S. Treasuries: $80.3 billion,
• Gold: $3.5 billion,
• Bitcoin: $2.8 billion, and
• VC investments: $1.5 billion.

 

Source: Tether

Tether also said that its excess reserves totalled $5.4 billion, sufficient to cover its outstanding secured loans in $4.8 billion.

Prudent Strategy Behind Tether’s Resilience

While the turbulent period in the crypto industry during 2022-2023 witnessed several large corporations collapsing, Tether emerged as a resilient player in the market with its wise operational strategy.

We can see Tether adopting a prudent strategy as it is backing its stablecoin, USDt, with the assets that are traditionally most relied upon for long-term.

This is not to say that the company has given up on virtual currency as a substantial amount of Bitcoin, the leading cryptocurrency since its inception, is also under its management.

USDt is the third largest cryptocurrency with a formidable market cap of $96 billion as per CoinGecko, and as far as stablecoins are concerned, USDt has been leading the charge for years.

Did You Know?

Apart from having the all assets on our spot market paired to USDt, we've also listed alternate Tether tokens pegged to the Euro & Gold - called EURt & XAUt.