Jan 31, 2024 - Business

Tether reports nearly $3 billion profit in fourth quarter

Illustration of the Tether coin wearing sunglasses and a hoodie.

Photo Illustration: Lindsey Bailey/Axios. Photo: Justin Tallis/Getty Images

The Tether group, issuer of the world's largest stablecoin, published its latest quarterly attestation Wednesday, showing its assets exceeded liabilities.

Why it matters: The tether stablecoin, known as USDT, is probably the most market-critical piece of crypto infrastructure outside of the Bitcoin blockchain.

Details: The attestation shows that the group had $97 billion in assets and $91.6 billion in liabilities on the last day of last year.

  • The figures are nearly entirely tied to the stablecoin.

Of note: The attestation, by BDO Italia, strictly covers the group's assets and liabilities on the day of Dec. 31, 2023. It says nothing about any time before or after that.

By the numbers: The report shows Tether holding $82 billion in cash equivalents, which is about $9.6 billion short of the USDT supply on Dec 31.

  • It shows three categories of cash-equivalent assets that amount to billions: U.S. Treasuries ($63 billion), overnight reverse-repurchase agreements ($9.4 billion) and money market funds ($8.3 billion).
  • It's non-cash equivalent holdings included $3.5 billion in precious metals and $2.8 billion in bitcoin. The category also includes secured loans, corporate bonds and other investments.

What they're saying: "In line with the commitment to transparency and stability, Tether issued tokens backed by Cash and Cash Equivalent at an impressive 90%, emphasizing its dedication to maintaining liquidity within the stablecoin ecosystem," the company wrote in its blog post about the report.

  • The post notes approximately $1 billion in operating profits, primarily from interest on U.S. Treasuries, and $1.85 billion from appreciation in its reserves of bitcoin and precious metals.

Meanwhile, the group has roughly $1.5 billion in long-term investments in businesses like bitcoin mining, AI and telecommunications, but it did not count these in its $97 billion in assets because they are much less liquid.

Zoom out: While the crypto market has perked back up, stablecoin supply has lagged. However, since the downturn in 2022, Tether has cemented its dominant position.

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