Tether, the leading stablecoin provider, has reported an astounding $4.52 billion profit for the first quarter of 2024, shattering its previous records. The company’s impressive financial performance can be attributed to a combination of its substantial U.S. Treasury holdings and significant gains in its Bitcoin and gold reserves.
TLDR
Tether reported a record-breaking $4.52 billion profit in the first quarter of 2024.
The majority of the profit, approximately $1 billion, came from Tether’s U.S. Treasury holdings, which back its stablecoin, USDT.
The remaining profit was attributed to significant gains in the value of Tether’s Bitcoin and gold reserves.
Tether’s Bitcoin holdings rose from $2.8 billion to $5.4 billion, while its gold position increased from $3.5 billion to $3.7 billion.
The company’s excess reserves now total $6.3 billion, providing a buffer against potential drawdowns or risks.
According to Tether’s Q1 2024 attestation report, released on Wednesday, the company earned approximately $1 billion in net operating profits from its U.S. Treasury holdings.
These short-term Treasury bills make up the majority of Tether’s reserves, which back its $110 billion dollar-pegged stablecoin, USDT.
Visualization of the Reserves as of 31 March 2024, Source.
In the first quarter alone, more than 12 billion new USDT tokens were issued, reflecting the stablecoin’s growing popularity.
However, the bulk of Tether’s record-breaking profit can be credited to the substantial appreciation of its Bitcoin and gold holdings.
Compared to the previous quarter, the size of Tether’s Bitcoin reserves surged from $2.8 billion to $5.4 billion, while its gold position rose from $3.5 billion to $3.7 billion. These mark-to-market gains have significantly contributed to the company’s overall financial success.
Tether’s CEO, Paolo Ardoino, took to Twitter to highlight the company’s commitment to transparency, openness, and conservative risk management.
He noted that Tether maintains a large amount of excess reserves, providing disclosures for the Group.
My summary Tether’s Q1/2024 attestation. Another great quarter!
As of 31st March 2024:
– $4.52 Billion Profit for Q1/2024. ~1 billion in net operating profits, primarily derived from US T-Bills. The remainder derived from mark-to-market gains in Bitcoin and Gold positions.
-… https://t.co/kCBYQw9JGx
— Paolo Ardoino ???? (@paoloardoino) May 1, 2024
The company’s excess reserves now total $6.3 billion, an increase of nearly $1 billion from the previous quarter. These reserves serve as a buffer against potential drawdowns or risks related to Tether’s core reserve composition and more than cover the $4.7 billion worth of secured loans on its balance sheet.
Despite its impressive financial performance, Tether has yet to undergo a formal audit by one of the “Big Four” accounting firms.
Ardoino has claimed that this is due to the perceived reputational risk associated with the company. However, he has stated that Tether is working to build relationships with these firms to secure an audit in the future.
In the meantime, Tether’s quarterly “attestation” reports, as attested to by BDO, provide insight into the company’s financial standing.
These reports have garnered support from prominent figures in the financial industry, such as Cantor Fitzgerald CEO Howard Lutnick, who has backed Tether’s claims regarding its bond portfolio.
As Tether continues to expand its business beyond stablecoins, launching new initiatives in data, blockchain-based financial infrastructure, and mining and energy sectors, its record-breaking profits in the first quarter of 2024 demonstrate the company’s strong financial position and its ability to navigate the ever-evolving cryptocurrency landscape.
The post Tether Shatters Profit Records: Inside the Stablecoin Giant’s $4.52 Billion Quarter appeared first on Blockonomi.