In the first nine months of 2024, Tether Holdings Limited reported a staggering profit of $7.7 billion. A mind boggling figure that is part of a record-breaking year for the crypto fintech company, with Q3 alone contributing $2.5 billion to the total. A level of profitability that is unseen for a small company of only 50 employees.
What Investments Does Tether Focus On?
Apart from its core business, providing a system for synthetic dollars, Tether is diversifying its investments through its Tether Investments arm, where the company has allocated $7.7 billion to various sectors including renewable energy, Bitcoin mining, artificial intelligence, telecommunications, and education.
How Much Are The Actual Tether (USDT) Reserves Worth?
The reserves backing Tether tokens amount to $125.4 billion, exceeding the token liabilities of $119.3 billion by about $6 billion. This means Tether maintains more in reserves than needed to back all circulating tokens.
Here’s the breakdown:
- U.S. Treasury Bills: $84.5 billion
- Overnight Reverse Repo Agreements: $12.5 billion
- Money Market Funds: $6.4 billion
- Bitcoin Holdings: $4.7 billion
- Physical Gold: $4.9 billion
- Secured Loans: $6.7 billion
- Other Investments: $3.7 billion
- Additional smaller holdings in cash, non-US Treasury bills, and corporate bonds
Tether’s reserve holdings have also reached new heights, with over $102.5 billion invested in U.S. Treasury securities. This makes Tether one of the top holders globally, surpassing many countries such as Germany, Australia, and the UAE in terms of the volume of U.S. Treasuries held.
How Does Tether’s Employee Efficiency Stack Up?
With just 50 employees, Tether’s profit per employee stands at an impressive $200 million for the year 2024. This is peak efficiency with lean operations at Tether and also their massive profitability in the stablecoin market.
Is Tether Still Facing Any Legal Issues?
Yes, Tether is currently involved in three ongoing civil lawsuits in New York:
- A class action about Bitcoin’s price drop in 2017-2018
- A case related to the Celsius bankruptcy
- A dispute over USDT held in a non-Tether controlled wallet
What Future Trends Can We Expect With Stablecoins?
Given Tether’s substantial profit margins, it’s likely that the stablecoin market will see increased competition. Things about USDC or even more competitors that could enter the stablespace. This could mean that there is a more healthy, competitive market environment not waiting to implode and drag us down if another black swan event should happen…
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