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05/09/2023

Tether Reports Q1 2023 Profit of $1.5 Billion

In its second quarterly earnings report, Tether, the issuer of the largest stablecoin in the crypto market, has announced a profit of $1.5 billion, doubling its previous earnings. According to the Q1 2023 report, Tether, the company behind the USDT stablecoin, recorded a profit of $1.48 billion in the first three months of 2023. This figure is double the $700 million profit reported for Q4 2022 and also surpasses previous forecasts. Tether's Latest Q1 2023 Assurance Report Shows Reserves Surpl

Tether Reports Q1 2023 Profit of $1.5 Billion

In its second quarterly earnings report, Tether, the issuer of the largest stablecoin in the crypto market, has announced a profit of $1.5 billion, doubling its previous earnings.

According to the Q1 2023 report, Tether, the company behind the USDT stablecoin, recorded a profit of $1.48 billion in the first three months of 2023. This figure is double the $700 million profit reported for Q4 2022 and also surpasses previous forecasts.

Additionally, Tether's reserve surplus has reached $2.44 billion, nearly triple the $960 million recorded at the end of 2022. As of January 31, 2023, Tether reported holding $81.8 billion in assets to back its $79.3 billion in issued stablecoins.

As of March 31, 2023, Tether's assets include $53 billion in U.S. Treasury bonds and $15.7 billion in repo agreements, with cash holdings of just $481 million. Notably, this marks the first time the company has disclosed its Bitcoin and precious metals holdings, totaling $1.5 billion and $3.3 billion, respectively.

The company has reduced its loan exposure from 8.7% of total reserves to 6.5%, with plans to eliminate this figure entirely, as previously committed.

All assets backing USDT issued in Q1 2023 were deployed into U.S. Treasury bonds or repo agreements rather than held as cash, in order to reduce liquidity risk.

In an interview with Coin68 in April, Tether's Chief Technology Officer Paolo Ardoino stated that holding U.S. Treasury bonds is safer than holding cash — particularly in the wake of several U.S. bank collapses in March, which left Circle stuck with $3.3 billion in collateral backing its USDC stablecoin.

Ardoino commented on Tether's latest earnings report:

"We will continue to monitor the risk-adjusted returns of our asset portfolio and make necessary adjustments based on economic conditions and market cycles. This is part of our ongoing risk management process."

At the time of publication, USDT's market capitalization stands at over $82.5 billion, far ahead of its closest competitors, USDC ($30 billion) and BUSD ($5.7 billion).

The leading stablecoins in the crypto market as of 10:00 PM on May 10, 2023, per CoinMarketCap, reflect USDT's continued market cap stability and dominance.

USDT's market cap has held strong throughout 2023, while USDC continues to struggle to win back community confidence following its depeg during the U.S. banking crisis in March. BUSD has also taken a severe hit after regulatory action from New York and the SEC forced Paxos to halt new issuances and begin the redemption process ahead of February 2024.