Tether reports record-breaking $5.2B profit in first half of 2024

According to a July 31 announcement, Tether, manager of the dollar-pegged USDT stablecoin, reported record-breaking profits of $5.2 billion in the first half of 2024 and a larger-than-ever stockpile of United States government bonds. 

Tether’s US Treasury portfolio is now worth approximately $97.6 billion, the company said. The growth in the company’s Treasury holdings reflects the ongoing proliferation of Tether (USDT) stablecoins, which Tether says are backed 1:1 with liquid US dollar-denominated assets. The figures are based on an attestation by BDO, an independent accounting firm.

The total market capitalization of USDT stands at some $114 billion, according to Binance, slightly less than Tether’s total reserves, which exceed $118 billion, Tether said. 

Tether’s Treasury reserve surpasses the size of all but 17 of the world’s governments, including Germany, the United Arab Emirates, and Australia, Tether said. It also ranks third in purchases of 3-month US Treasurys after the United Kingdom and the Cayman Islands. 

“Given the trajectory of USDt adoption, [Tether] sees the potential of becoming 1st in the next year,” the company said.

The announcement also released figures for Tether’s consolidated net equity — the total of all company assets minus all liabilities — of $11.9 billion as of June 30. Tether issued around $8.3 billion in the second quarter. USDT is continuously issued and redeemed.

Tether’s balance sheet enables the company to “continue leading the stablecoin industry in stability and liquidity as well as to bring its expertise across different areas such as Artificial Intelligence, Biotech, and Telecommunications,” said Paolo Ardoino, CEO of Tether.

Tether says it has been reinvesting a portion of its profits in adjacent industries, including sustainable energy, Bitcoin mining, data, AI infrastructure, P2P telecommunications technology, neurotech, and education.

Stablecoins such as Tether and rival US Dollar Coin (USDC) are seeing rapid adoption, fueled largely by demand for faster and more secure cross-border payments. In May, research firm Sacra said stablecoins’ “extreme product-market fit for cross-border money movement” could see their total payments volume exceed Visa and reach over $4 trillion.

In combination with tokenized real-world assets, crypto is emerging as a leading source of demand for US Treasurys. Research strategist Tom Wan believes that the tokenized US Treasury market will reach $3 billion by the end of 2024.