Tether’s $2.5B Q3 Profit Driven by Soaring USDT Demand, Preps for Ripple Competition

• Tether achieved a record $2.5 billion profit in Q3 2024 due to strong demand for USDT and U.S. Treasury yields.

• The company’s cash reserves are backed by over $105 billion, mostly in U.S. Treasury bills.

Stablecoin issuer Tether has reported a record-breaking profit of $2.5 billion for Q3 2024, marking another robust quarter fueled by high demand for its USDT stablecoin and yields from its reserve-backed U.S. Treasury bonds. In its attestation report released on Oct. 31, Tether stated that the company has already generated $7.7 billion in profit for 2024, with equity reserves of $14.2 billion and assets of $134.4 billion.

The USDT stablecoin of Tether has witnessed an almost 30% increase in circulation in 2024, with $120B worth of tokens in circulation following an extra $27.8B worth of tokens being issued this year. This growth indicates the rising use of Tether’s stablecoin as a stable and reliable means of communication in the crypto market.

Currently, Tether has more than $105 billion in cash and cash equivalents, and the majority of that amount, $102.5 billion, comes from U.S. Treasury bills. The Tether’s Treasury holdings have risen by 5% since July, when the company disclosed that they had $97.6 billion in the portfolio. This puts Tether on the list of the first 18 official holders of US debt, leaving behind countries like Germany, Australia and UAE.

Besides stablecoin demand, Tether has benefited from high returns on its Treasury securities to ensure it remains liquid. According to the company, it has increased its reserves by 15% within the last nine months and now stands at over $6 billion. The assets and liabilities of the total reserve are around $125 billion, while the liabilities arising from the token issuance are around $119 billion.

Diversified Holdings Enhance Financial Stability

Tether’s financial strategy is not limited to cash; the company has other financial assets in its holdings. As of the latest report, the company has approximately 7,100 Bitcoins, estimated to be valued at approximately $500 million. Moreover, Tether has its capital invested across many industries, such as renewable energy, artificial intelligence, telecommunications, and education.

In Q3 2024, Tether also had unrealized gains of about $1.1 billion from the gold that they held, which also added to the strength of the company’s balance sheet. The diversification of tether in various asset classes has not only helped boost the stability of the asset but also helped it to take its place in the world of finance. 

 CEO Paolo Ardoino also commented on the development trends, with a positive outlook for the fourth quarter of 2024. Ardoino noted that Tether Insights recently reported that more than 330 million on-chain wallets and accounts had engaged with USDT, excluding millions of other users on centralized exchanges.

Tether recently celebrated its 10-year anniversary, citing the growth of the market, especially after the 2022 FTX debacle and the enhanced focus on regulation in the US. This environment has changed the crypto landscape and Tether has adapted by stepping up its regulatory relations, integrating the FBI into its platform in 2023 and establishing stronger relations with U.S. authorities.