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Tether Reports $2.5 Billion Profit in Q3, Backed by Gold and US Treasuries

Published November 03, 2024
3 months ago

Tether Holdings, the company behind the widely-used stablecoin USDT, has reported an impressive profit of $2.5 billion for the third quarter. This significant financial achievement comes amid an increase in demand for stablecoins during a crypto market rise.





Stablecoins like USDT serve as a digital equivalent to traditional currencies, aiming to maintain a stable value against assets such as the US dollar. Tether's model is to back its tokens largely with cash and cash equivalents, ensuring users can trust the one-to-one peg with fiat currency.


The British Virgin Islands-incorporated Tether, which prides itself on preserving liquidity and stability, has disclosed that a considerable portion of the profits stemmed from their strategic holdings in US Treasuries and gold. This success is noteworthy considering Tether does not release fully audited financial statements but instead opts for third-party attestations, with the latest provided by accounting organization BDO.


Tether's blog post detailed how their investments, including sizeable positions in Treasury bills, have proved lucrative. The interest from these holdings contributes directly to their profits. Furthermore, their gold investments culminated in an estimated $1.1 billion of unrealized gains.


The stablecoin issuer's active treasury management strategy has resulted in a reserve surplus reported to be over $6 billion. Their direct and indirect holdings in US Treasuries have crossed the $102 billion mark, providing a robust financial base for the issued USDT tokens.


In addition to financial markets, Tether has diversified its revenue stream by investing in various sectors. With a focus on future growth, they’ve allocated $7.7 billion of profit into renewable energy, Bitcoin mining, artificial intelligence, telecommunications, and education. Notably, Tether's investment arm now owns approximately 7,100 Bitcoin.


These investments and the disclosure are part of Tether's commitment to transparency, which heightened following a settlement with US authorities. The agreement necessitated regular reserve reports addressing past allegations of misrepresenting reserves and fund losses. This latest report counters skepticism and continues to build trust among investors and users.


With the circulating value of Tether's USDT closing in on $120 billion, the company remains a dominant force in the stablecoin market. Their strategic investments and commitment to compliance demonstrate Tether's intent to maintain its market position and support the broader cryptocurrency ecosystem.


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