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BTC $96,420 +2.34% ETH $3,280 +1.82% SOL $185.40 -0.92% BNB $642.50 +0.45% XRP $2.18 +3.12% DOGE $0.082 -1.50% ADA $1.05 +0.80% AVAX $42.10 +1.15%
03/23/2023

Tether Projected to Earn $700 Million in Q1 2023

Tether, the issuer of the largest stablecoin USDT, is expected to report a profit of $700 million for Q1 2023, driven by the decline of other stablecoins in the market. Tether has teamed up with the world's fifth-largest auditing firm to provide proof of reserves for USDT. Paolo Ardoino, Tether's CTO, revealed to CNBC that the company estimates a net profit of $700 million for the first quarter of 2023, bringing its surplus assets to over $1 billion. According to CoinMarketCap, the circulating

Tether Projected to Earn $700 Million in Q1 2023

Tether, the issuer of the largest stablecoin USDT, is expected to report a profit of $700 million for Q1 2023, driven by the decline of other stablecoins in the market.

Tether partners with the world's fifth-largest auditing firm to produce a proof-of-reserves report for USDT

Tether has teamed up with the world's fifth-largest auditing firm to provide proof of reserves for USDT. Paolo Ardoino, Tether's CTO, revealed to CNBC that the company estimates a net profit of $700 million for the first quarter of 2023, bringing its surplus assets to over $1 billion.

According to CoinMarketCap, the circulating supply of USDT has surged from $70.98 billion to $78.14 billion since the beginning of March, meaning Tether has issued roughly $8 billion in under a month. Most recently, $5 billion worth of USDT was minted in a single week, as reported by Coin68.

Tether's large-scale USDT issuance coincided with turmoil at its chief competitor, Circle's USDC, which suffered a serious loss of investor confidence. USDC depegged sharply, falling as low as $0.87, while other stablecoins including BUSD, DAI, and FRAX were also caught up in a wave of FUD sweeping the financial sector.

Throughout this period, USDT stood as the only stablecoin reliably holding its $1 peg, effectively becoming a safe haven for most investors. That surge in demand is what drove Tether's growth during this stretch, according to Ardoino.

When asked about a hypothetical scenario in which Tether faces a crisis similar to what Circle experienced, Ardoino responded:

"Why do people always start questioning reserves right after traditional banks collapse? Tether keeps evolving while banks are failing. So if you need somewhere to park your money, I'd argue Tether is the safest option out there."

Back in October, Tether made the decision to completely eliminate commercial paper from the reserves backing USDT and shifted that allocation into U.S. Treasury bills. The company's other reserve assets include corporate bonds, money market funds, and precious metals.

According to auditing firm BDO's Q4 2022 financial report, Tether's reserves remain highly liquid, with the majority of holdings in cash or cash equivalents. For that quarter, the stablecoin issuer posted a net profit of $700 million; however, that profit was treated as "part of equity" and folded back into the company as additional capital to strengthen its financial position.