Tether Holdings, the company behind the world’s largest stablecoin Tether (USDT), has announced a remarkable net profit of $4.52 billion in the first quarter of 2024, marking a significant milestone for the company. The substantial profit was mainly attributed to the firm’s financial gains on Bitcoin and gold, amounting to $3.52 billion, and an additional $1 billion from operating profits.
This achievement represents a significant increase compared to the previous quarter, with Tether’s net equity reaching an impressive $11.37 billion as of March 31. This is a substantial jump from the previous record of $7.01 billion at the end of December 2023. CEO Paolo Ardoino emphasized the company’s commitment to transparency and its dedication to stability, liquidity, and responsible risk management.
The attestation report for Q1 2024 provided a comprehensive overview of Tether Group’s financial strength, revealing its success in increasing ownership of US Treasuries, which now exceed $90 billion. Tether’s fiat-denominated stablecoins were backed by cash and cash equivalents at an impressive rate of 90%, ensuring liquidity within the stablecoin ecosystem. The report also highlighted strategic investments of over $5 billion across various sectors, including AI, renewable energy, and BTC mining.
Despite concerns about the lack of a formal audit, Tether’s quarterly attestation reports offer insights into the company’s balance sheet, attested to by BDO, the fifth-largest accounting network globally. Tether’s decision to invest part of its operating profits in Bitcoin has proven to be lucrative, with the company’s Bitcoin holdings reaching 75,300 BTC, valued at over $4.38 billion. This diversification strategy has contributed to Tether’s continued success despite market volatility.
While Bitcoin’s price has experienced fluctuations since the end of Q1, Tether remains confident in its financial position. The company’s excess reserves amount to $6.3 billion, providing a buffer against potential risks. Tether CEO Paolo Ardoino expressed the company’s commitment to transparency and conservative risk management, maintaining a large amount in excess reserves and providing disclosures for the Group.
Despite Circle’s USDC surpassing Tether’s USDT in transaction volume, Tether remains dominant in the stablecoin market, commanding over 68% of the market with a market cap exceeding $100 billion. Analysts attribute USDC’s rise to its predominant use within the US for transactions, while USDT primarily serves as a dollar-based store of value held outside the US.
In a recent move, Tether has entered the healthcare sector with a significant $200 million investment in Blackrock Neurotech, a leading biotech company specializing in brain-computer interface (BCI) technology. This marks Tether’s first foray into the healthcare industry.
Despite Bitcoin’s recent fall below the $60,000 mark, Tether has an unrealized profit of over 91% and is valued at over $2 billion, according to CoinStats. Tether continues to demonstrate its resilience and remains a significant player in the cryptocurrency market.
