Tether reports nearly $3 billion profit in fourth quarter
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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.
- For years now the company has released similar quarterly attestations in lieu of a complete audit.
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.
