USDT Stablecoin Issuer Tether Reveals Bitcoin, Gold Reserves, Reports $1.48 Billion Q1 Profit

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Stablecoin issuer Tether reported net profit of $1.48 billion for the first quarter of the year, double the result of previous quarters, according to its latest attestation released on Wednesday.

The company first disclosed details of its bitcoin (BTC) and gold holdings in its consolidated reserves report. As of March 31, Tether held $1.5 billion worth of bitcoin on its balance sheet, or about 2% of roughly $80 billion in reserves, and $3.4 billion worth of gold, or about 4% of reserves.

This quarter’s attestation comes after a turbulent period for the $131 billion stablecoin market, when several tokens lost their dollar peg in a ripple effect as the US banking crisis hit Circles USDC, the second largest dollar pegged stablecoin. The New York Department of Financial Services also forced fintech company Paxos to stop issuing the third-largest stablecoin, Binance USD (BUSD), in February, while the US Securities and Exchange Commission (SEC) Unis reportedly probed the company for issuing BUSD as unregistered. security.

The dollar-pegged USDT, the largest stablecoin with a supply of $81.8 billion as of May 9, was one of the big winners from the calamity, increasing its market capitalization by $16 billion since the start. of the year, representing growth of 24%. Tether also issues stablecoins pegged to other currencies and gold, which represent a fraction of the market capitalization of USDT.

Tether has become the most trusted stablecoin in the industry due to its perceived security by the SEC and due to its peg security lately, wrote Conor Ryder, an analyst at digital asset research firm Kaiko, in a note.

According to the first-quarter attestation signed by financial services firm BDO Italia, Tether held approximately $2.44 billion in excess reserves out of the $79.4 billion in Tether-issued tokens in circulation as of March 31. That surplus was at an all-time high, Paolo Ardoino, Tether’s chief technology officer, said in the announcement.

All of the newly issued tokens were invested in US Treasuries or deposited in overnight repurchase and reverse repurchase facilities, Tether said. The company held about 85% of all reserve assets in cash and cash-like assets, including US Treasury bills and bank deposits.

Tether continued to reduce the amount of secured loans in its reserves, reducing them by around $500 million to $5.3 billion in the first quarter. The company promised in December to exit these holdings completely this year.

Tether has been criticized for years in the crypto industry for its lack of transparency about its reserve assets and its controversial maneuvers. Last year, a U.S. judge ordered the company to produce documents supporting USDT in a lawsuit that alleged Tether conspired to inflate the price of BTC with newly issued stablecoins.

We have an extremely positive outlook and remain committed to transparency, which is why we have introduced new categories in the breakdown of reserves in our quarterly report to provide even more transparency to our users,” Ardoino said in the statement.

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