Tether, the company behind the largest stablecoin, reported a significant profit of $2.5 billion in the third quarter. This profit was mainly driven by gains from its holdings of US Treasuries and gold. The company, which is closely held and based in the British Virgin Islands, disclosed this information as part of a third-party attestation by BDO, as it does not release audited financial statements.
The market value of Tether’s USDT token has soared to nearly $120 billion, reflecting the increased demand for stablecoins during the recent crypto bull market. Tether also stated that it holds more than $6 billion in excess reserves, providing a strong financial position.
Stablecoins are a type of cryptocurrency designed to maintain a 1:1 value with fiat currencies like the US dollar. They are typically backed by cash and cash equivalents. Tether reported that it has significantly increased its ownership of Treasuries, with holdings now exceeding $102 billion. The company earns profits on the interest paid from the Treasury bills that back its stablecoins.
In addition to its Treasury holdings, Tether also saw substantial profits from its gold holdings, adding about $1.1 billion in unrealized profits. Another $1.3 billion was derived from its Treasuries exposure in the most recent quarter. The company has been actively investing its profits in various sectors, including renewable energy, Bitcoin mining, artificial intelligence, telecommunications, and education. Tether’s investment arm currently holds 7,100 Bitcoin as of September 30th.
It is worth noting that Tether agreed to publish quarterly reports on its reserves following a settlement with US authorities in February 2021. This settlement was reached after allegations that Tether had misrepresented its reserves and concealed losses in previous years.
Overall, Tether’s strong financial performance in the third quarter underscores the increasing importance of stablecoins in the cryptocurrency market. With a robust financial position and strategic investments in key sectors, Tether is well-positioned to continue its growth and innovation in the evolving crypto landscape.
