2min read
Published on: Feb 1, 2024
#Crypto 360
#Blockchain
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.
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.
As per the latest report, Tether holds:
Source: Tether
Tether also said that its excess reserves totalled $5.4 billion, sufficient to cover its outstanding secured loans in $4.8 billion.
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.
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.
This article is for informational purposes only and not intended as investment or financial advice. It contains opinions and speculations that are subject to change without notice.
The author and publisher disclaim any liability for decisions made based on the content of this article. Readers are advised to conduct their own research and consult a financial advisor before making investment decisions.
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