Remarkable Financial Performance
Tether, the powerhouse behind the world’s largest stablecoin USDT, announced on Friday that it achieved an impressive $13 billion in net profits for the year 2024. This milestone marks a significant accomplishment for the company and highlights its resilience in a fluctuating market.
Sources of Profit
Out of the total profits, approximately $7 billion stemmed from Tether’s substantial holdings in U.S. Treasuries and repurchase agreements (repos). Additionally, the company’s investments in gold and Bitcoin (BTC) contributed around $5 billion due to unrealized appreciation. Other investments across various assets accounted for the remaining $1 billion in profit.
Asset Reserves and Financial Stability
According to the latest quarterly attestation from the accounting firm BDO Italy, Tether International Limited and Tether Limited reported impressive asset reserves totaling $143.7 billion, while liabilities stood at $136.6 billion. This results in a robust excess reserve of $7 billion, providing strong backing for its stablecoins. Notably, Tether’s reserve of Treasury bills has increased to a remarkable $94.5 billion.
Increased Bitcoin Holdings
In a positive development, Tether expanded its Bitcoin holdings last quarter for the first time since March. As of year-end, the company possesses nearly 84,000 BTC, valued at approximately $7.8 billion, showcasing its strategic approach to cryptocurrency investment.
USDT’s Market Position
With a market capitalization of $140 billion, Tether’s USDT remains the fourth largest cryptocurrency in the world. It serves as a critical infrastructure component for digital asset trading and has gained popularity in developing regions for payments, remittances, and savings in U.S. dollars. However, recent regulatory changes, particularly the MiCA regulations, have led several exchanges to delist or suspend USDT for EU users, resulting in a decline in the token’s supply.
Future Plans: Relocation to El Salvador
In a move signaling its commitment to the cryptocurrency ecosystem, Tether announced plans to relocate its headquarters to El Salvador. This Central American nation has gained recognition as a Bitcoin-friendly environment under the leadership of President Nayib Bukele, positioning itself as an emerging hub for crypto firms.
In conclusion, Tether’s remarkable financial performance, bolstered by strategic investments and a strong asset reserve, underscores its pivotal role in the cryptocurrency landscape as it navigates regulatory challenges and seeks new opportunities in the evolving market.
