Altcoin News: Tether Earns a Staggering $1.5 Billion in Q1, Doubling Its Previous Quarter’s Profit
Stablecoin issuer, Tether, reported a profit of $1.5 billion during the first quarter of 2023, more than double during the last quarter. Accordingly, to the latest attestation report, Tether’s consolidated total assets amounted to at least $81.8 billion, while its consolidated total liabilities amounted to $79.4 billion, indicating excess reserves of at least $2.44 billion — an all-time high.
For the first time, Tether also included additional categories in its reserves reporting, including bitcoin, physical gold, overnight repo, and corporate bond allocations. It holds $1.5 billion worth of bitcoin and $3.3 billion worth of precious metals. The majority of its investments, around 85%, are held in cash, cash equivalents, and other short-term deposits, with gold and bitcoin representing around 4% and 2% of the total reserves, respectively.
This news comes after a turbulent period for the stablecoin market, during which several tokens lost their dollar pegs. However, Tether’s dollar-pegged USDT has increased its market capitalization by $16 billion since the start of the year, representing 24% growth.
Tether has been criticized in the crypto industry for years for lack of transparency about its reserve assets and controversial maneuvers. Last year, a U.S. judge ordered the firm to produce documents about USDT’s backing as part of a lawsuit that alleged Tether conspired to inflate BTC’s price with newly issued stablecoins.
Despite the criticism, Tether’s latest attestation report indicates that the firm is continuing to grow and diversify its reserves. It has also promised to completely exit from secured loans this year.
What is Tether:
Tether is the most widely adopted coin in circulation. USDT was the first-ever stablecoin introduced to the market. It is designed to peg its issued coin 1-to-1 with the Dollar. Tether was one of the first stablecoins issued in several blockchains, available on the Tron, ETH, Omni, EOS, Algorand, Solana, and the Binance Smart Chain (BSC) networks. It has received mass adoption as the reserve currency for most traders as it doesn’t fluctuate like typical crypto coins.
Tether Diversifies Reserves: A Closer Look
The inclusion of additional categories in Tether’s reserves reporting showcases the company’s efforts to diversify its reserves and increase transparency within its operations. Tether holds a significant amount of bitcoin, which is currently valued at $1.5 billion, as well as physical gold, which has a worth of $3.3 billion. The company’s investments in overnight repo and corporate bonds further show its dedication to maintaining a diverse portfolio.
Cash, cash equivalents, and other short-term deposits make up the majority of Tether’s investments, accounting for roughly 85% of its total reserves. In contrast, gold and bitcoin represent only a small fraction, with 4% and 2% shares in the total reserves, respectively.
Tether’s Growth Amid the Turbulence in the Stablecoin Market
Despite concerns surrounding the stablecoin market, Tether’s USDT has shown impressive growth since the beginning of the year. With a market capitalization increase of $16 billion, the digital currency has experienced 24% growth.
Tether’s continued success amidst criticism suggests the company has been able to maintain trust with its users. The crypto industry’s concerns about Tether’s transparency and reserve assets have not stopped Tether from expanding and diversifying its operations.
Exiting Secured Loans & Looking Ahead
Tether’s plans to exit secured loans entirely in the coming year reflect its commitment to transparency and meeting regulatory requirements. By taking these steps, the company aims to address concerns about its operations and alleviate any doubts surrounding its stablecoin.
In conclusion, Tether’s noteworthy profits of $1.5 billion in Q1 2023 demonstrate the stablecoin issuer’s growth in the face of criticism and market turbulence. The company’s diverse reserves and total assets under management are indicative of its efforts towards increased transparency and expansion.
As the most widely adopted coin in circulation, Tether’s USDT has a significant impact on the crypto market. Its continued growth and commitment to meeting regulatory requirements suggest that Tether is well-positioned to maintain its strong presence in the marketplace.