Stablecoin issuer Tether experienced a “record-breaking” net profit surge, amounting to $2.85 billion in the fourth quarter of 2023.

Around $1 billion of this profit stemmed from net operating gains, largely derived from interests in the US Treasury, with the remainder mainly coming from the appreciation of gold and Bitcoin reserves.

  • Notably, there was a substantial increase in excess reserves, reaching a historic high of $5.4 billion, with an additional $640 million directed towards strategic investments in various projects, including mining, AI infrastructure, and P2P telecommunications, among others.
  • Tether’s Q4 attestation, signed by BDO Italy, also revealed the elimination of secured loan risks from its token reserves, addressing community concerns.
  • While such secured loans are widely overcollateralized, Tether accumulated enough excess reserves to cover the entirety of the exposure. This is in response to the community’s past expressed concerns about this part of the portfolio.
  • Tether’s core operation revolves around managing the USDT stablecoin, contributing significantly to the company’s 2023 net profit of $6.2 billion.
  • Approximately $4 billion of this profit was derived from investments in US Treasuries, Reverse Repo, and Money market funds, showcasing successful diversification efforts, according to the report.
  • In its official statement. Paolo Ardoino, CEO of Tether, said,

“Tether’s Q4 attestation underscores our commitment to transparency, stability, and responsible financial management. Achieving the highest percentage of reserves in Cash and Cash Equivalents reflects our dedication to liquidity and stability.”

  • In the fourth quarter, Tether increased its Bitcoin holdings by acquiring an additional 8,888 bitcoins, bringing its total to roughly 66,465 bitcoins, which are currently valued at approximately $2.8 billion.
  • The report comes amidst a significant increase in USDT’s market cap, which is currently hovering above $96 billion.
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