Leading stablecoin company Tether generated record profits topping $2.85 billion this past quarter, even as cryptocurrencies surfed through harsh bear market conditions. The considerable uptick came primarily from returns from low-risk government debt and gold holdings.
Financial statements released earlier show Tether’s net income nearly doubling since last fall. U.S. Treasury bonds made up over a third of gains, while Bitcoin and gold reserves contributed several hundred million each toward the bottom line.
For all of 2023, Tether profited just over $6.2 billion, mostly driven by interest from Treasurys and supplementary investments beyond volatile digital tokens.
As crypto asset values dropped last year, Tether pivoted toward safer balance sheet assets to back its namesake token. The firm now holds over $80.3 billion in U.S.-issued bonds, considered among the world’s most secure.
Tether adopted minimized portfolio risk
Tether’s increased exposure to government debt capable of generating a consistent yield aligned with the community calls for reduced portfolio risk after disastrous industry setbacks. The company also finished paying back high-interest loans collateralized against its token reserves.
The conservative positioning, combined with dollar-pegged USDT capturing a greater stablecoin market share, fueled substantial monetary success despite crypto entering an ice age. Tether has consolidated its position as the clear sector leader, comprising over 70% of all stablecoins now.
With asset deterioration quashing earlier industry growth projections, market watchers consider Tether’s pivot exemplary for weathering perfect storms like 2023’s without major asset drawdowns or customer confidence blows.
Of course, the company doesn’t escape ongoing regulatory clashes as agencies prioritize tighter stablecoin oversight this year. But its proactive balance sheet de-risking helped avert catastrophe and offers blueprints for industry revivals.
