Tether Smashes Records, $1.48 Billion Profit In Q1- Surplus Over Reserves Hits All-Time High

Tether Holdings Limited, the issuer of the world’s largest stablecoin, USDT, has published its Q1 2023 Assurance Report, attested to by BDO Italia, a top five-ranked global independent public accounting firm. The report re-affirms the accuracy of Tether’s Consolidated Reserves Report (CRR), which details the assets held by the group as of March 31, 2023.

The CRR includes additional categories for the first time, including physical gold, overnight repo, corporate bonds, and Bitcoin ownership, which aim to increase transparency into Tether’s reserves reporting. Furthermore, the report reveals an increase in Tether’s excess reserves, reaching an all-time high of $2.44 billion, up from $1.48 billion in the previous quarter.

The recently released Q1 2023 Assurance Report highlights the stablecoin’s impressive performance in the year’s first quarter. The report shows that Tether’s net profit for the quarter was a staggering $1.48 billion, contributing significantly to strengthening its reserves. Moreover, the report reveals that the token in circulation increased by 20% during the quarter, indicating the high trust that Tether’s customers have in the stablecoin. 

In addition, the company ended the first quarter of 2023 with consolidated total assets of $81.8 billion, with most of its reserves invested in U.S. Treasury securities. Tether is also taking steps to reduce its reliance on pure bank deposits as a source of liquidity. It utilizes the repo market as an additional measure to ensure a higher protection standard for its users by maintaining the necessary liquidity.

The report demonstrates Tether’s commitment to transparency, with most of its investments being held in cash, cash equivalents, and other short-term deposits (approximately 85%). 

It also highlights a 25% reduction in secured loans from 8.7% to 6.5% of this asset class within the overall reserves and the highest percentage of assets allocated in US Treasury Bills to date. Gold and Bitcoin represent 4% and 2% of the total reserves, respectively. All new issuance of tokens has been invested in US Treasury bills or placed in overnight Repo.

Last but not least, Tether has outperformed BlackRock, one of the world’s leading providers of investment, advisory, and risk management solutions, in terms of net income in Q1 of 2023. While BlackRock reported a net income of $1.16 billion for the quarter, Tether reported a net income of $1.48 billion, highlighting the confidence investors had in the stablecoin issuer and the crypto market as a whole.

Tether’s report reveals that its consolidated total liabilities amount to $79.4 billion, of which $79.3 billion relates to digital tokens issued. Despite this, the group’s consolidated assets exceed its consolidated liabilities, demonstrating the strength and stability of the platform.

Tether’s success in Q1 2023 is evident, with its reserves’ surplus reaching an all-time high of $2.44 billion and net profits for the quarter of $1.48 billion. Paolo Ardoino, CTO of Tether, attributes this success to the strength and stability of the platform, as well as the company’s ongoing risk management processes.

Per the report, Looking ahead to Q2, Tether has an extremely positive outlook. It evaluates the global economic environment to ensure its customers’ funds are not exposed to high-risk scenarios. With its reserves remaining extremely liquid and diversified across various asset classes, Tether remains a leading stablecoin issuer in the cryptocurrency market.

Featured image from Unsplash, chart from TradingView.com