Tether Clocks $6.2 Billion Profit in 2023; $2.85 Billion in Q4

Tether (USDT) Record Net Profits in the 4th Quarter of 2023

Tether’s latest attestation report shows a record net profit of $2.85 Billion for Q4, while the net profit for 2023 stands at $6.2 Billion. At press time, USDT market capitalization was around $90 Billion and the price was hovering around the $0.9996 mark.

In Q4, 2023, the profits were driven by ‘net operational profit’ which is interest generated from US Treasury bills, which is around $1 Billion. Gold and Bitcoin (BTC) accounted for the remaining profits. Pre Ardoino’s tweet, cash and cash equivalents account for over 90% of the issued tokens

Tether Q4/2023 attestation is out.

My summary:

– profit for the quarter: $2.85B, of which ~$1B in net operational profit (mainly US t-bill interests), ~$1.85B from gold and #bitcoin holdings.

– total profit for 2023: $6.2B.

– cash & cash equivalents cover now 90% of all… https://t.co/AXjDw33QTc

— Paolo Ardoino 🍐 (@paoloardoino) January 31, 2024

Stablecoins are cryptocurrencies that are pegged to traditional assets like national currencies, commodities, etc. Tether is a leading stablecoin in terms of both market capitalization and adoption. It is pegged to the US dollar and it is 100% backed by reserves. Latest numbers suggest that stablecoins could lead the way for the integration of blockchain-based assets with traditional finance.

Total exposure (direct + indirect) to treasury bills or ‘T-bill’ stands at $80.3 Billion. Excess equity was at $5.4 Billion, which is an all-time high. Tether’s VC arm will invest part of the profits in ‘AI infrastructure, Bitcoin mining, P2P telecommunications and others.’

T-bills are debt instruments that the US government uses to raise money. The yield is essentially the interest accrued on the T-bill. Government securities such as T-bills are perceived as relatively safe investment assets.

‘excess equity > remaining secured loans ($5.4B vs $4.8B). In 2023, as promised, Tether accumulated enough excess equity to remove the impact of secured loans on token reserves.’ wrote Ardoino.

Previous Quarters, BTC Holdings

Profits for the other preceding quarters of 2023 were similar, none higher than Q4, though. Q1 profits stood at around $1.48 Billion; Q2 profit was over $850 Million; and profit in Q3 was around $1 Billion. For 2023, out of the $6.2 Billion in profits, approximately $4 Billion came from ‘US Treasuries, Reverse Repo and Money market funds while the rest was generated through the performance of other asset classes’, per the attestation report.

Tether Group’s total assets under management (AUM) stood at $98.47 Billion. BlackRock has over $9 Trillion in AUM. After purchasing 8,888 BTC in Q4, the stablecoin issuer now owns 66,456 BTC, which is around $2.8 Billion.

Mr. Pratik chadhokar is an Indian Forex, Cryptocurrencies and Financial Market Advisor and analyst with a background in IT and Financial market Strategist. He specialises in market strategies and technical analysis and has spent over a year as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the Financial markets.