Tether’s Q1 Milestones: Increased Profits, Gold and Bitcoin Holdings, and Market Cap Growth

Tether has recently released its Q1 2023 attestation report from BDO, showcasing several significant milestones. Tether has always been dedicated to providing a reliable peer-to-peer cash alternative to the crypto community and people worldwide, and its attestations play a crucial role in maintaining transparency and stability.

One of the notable achievements in Q1 was Tether’s record net profit of $1.48 billion, leading to a surplus in reserves reaching a new all-time high of $2.44 billion. This surplus acts as a buffer, allowing Tether to absorb any volatility with ease and instilling confidence among users.

Furthermore, Tether has continued to reduce its secured loans in line with its previous commitments, resulting in a decrease from 8.7% to 6.5% in net loans as a percentage of reserves. Tether’s aim is to ultimately eliminate secured loans entirely. Notably, Tether has never experienced losses on its loans, even during industry crises, thanks to its overcollateralization and efficient margin call practices.

In terms of reserve holdings, Tether made a significant shift by reducing its commercial paper holdings to zero in 2022 and investing in US Treasuries. As of Q1 2023, Tether’s treasury direct holdings reached an all-time high of over $53 billion, representing more than 64% of its total reserves.

These holdings, along with other reserves in the Cash and Cash Equivalent category, such as overnight Repo, Term Repo, Money market funds, Cash, and Bank deposits, account for nearly 85% of Tether’s reserves. This high-quality and liquid collateral can be rapidly sold to process redemptions, further strengthening Tether’s stability. The inclusion of US Treasuries in its reserves has positioned Tether as a significant holder, ranking just below Mexico in terms of the number of treasuries owned among all countries.

To mitigate counterparty risk, Tether has significantly reduced its bank deposits by over 90% from $5.3 billion to $481 million in Q1. This reduction not only lowers exposure to bank failures but also spreads the deposits across different banks. Tether recognizes the importance of insulating stablecoin users from counterparty risks to ensure a reliable and stable peer-to-peer cash experience.

In terms of new issuance, Tether allocated all incoming funds from token issuance to US Treasuries or overnight reverse repo facilities, fully collateralized by US Treasuries. This move has led to $7.5 billion parked in overnight repo facilities, increasing Tether’s extremely liquid collateral while mitigating counterparty risks.

Moreover, Tether has enhanced its transparency by including categories for Gold and Bitcoin holdings in the Q1 attestation report. Gold represents 4% of total reserves, while Bitcoin represents 1.8%. This commitment to transparency solidifies Tether’s position as an industry leader for stablecoin disclosure.

Tether’s impressive Q1 results and its dedication to token stability position it favorably among financial institutions. The profits generated by Tether are reinvested into reserves, bolstering its stability and benefiting users.

In fact, Tether reported higher Q1 profits than well-established entities like Blackrock, Netflix, Starbucks, Cash App, PayPal, and many other S&P 500 corporations. Tether’s ability to achieve such milestones while operating as a fully reserved stablecoin firm, in contrast to fractional reserve banking, demonstrates its resilience during black swan events. Tether effortlessly processed redemptions of over $20 billion within approximately 20 days during the black swan events of 2022, a feat unmatched by any bank in financial history.

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