Tether Reports $2.5 Billion Net Profit in Q3 from US Treasuries and Gold Gains

Criminal investigations be damned – top stablecoin Tether (USDT) has enjoyed an immense third quarter in 2024. The tokenised asset pegged to the US Dollar has long been the third-highest market cap crypto, trailing only Bitcoin and Ethereum. 

According to CoinMarketCap, Tether is consistently the most-traded digital asset on any given day – even in the face of slight de-pegging troubles in the past week. 

The success of USDT has been reflected in its quarterly earnings report, with the issuing company Tether revealing profits of US $2.5b (AU $3.8b).

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So, how does a stablecoin company actually make money?

Tether Claims Over US $6b in Reserves Excess Among Impressive Profits

At first glance, Tether’s Q3 earnings are quite impressive – but actually fell slightly behind its average quarterly earnings to date (with YTD profits coming in at US $7.7b). Nevertheless, at this point Tether’s performance has more to do with macroeconomic factors than the trading volume of its stablecoin. 

This is because Tether has invested heavily in US Treasury holdings, which returned approximately US $1.3b (AU $1.98b) over the past three months.

In an interesting twist – that some might call a betrayal to the industry – Tether also owns a significant portion of gold. This contributed around US $1.1b (AU $1.67b) to the company’s Q3 profits.

Although the corporate portfolio growth is impressive, the most appealing aspect of Tether’s Q3 report was related to USDT. The company noted that it has over US $6b (AU $9b) in excess reserves, which is likely more than enough to counter any catastrophic de-pegging event.

Additionally, USDT’s market cap has exploded by 30% since the start of 2024, pushing it toward US $120b (AU $182b).

Tether Urged to “Sue for Defamation” Following WSJ Report

Things are looking up for Tether – but the company has never been too far from controversy.

Prominent US newspaper the Wall Street Journal (WSJ) reported that US authorities were investigating Tether over “possible violations of sanctions and anti-money-laundering rules.”

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It’s an interesting case – similar to the allegations against Binance – where the company is being accused of allowing criminal activity to occur using their issued asset.

Tether CEO Paolo Ardoino was not too happy about the allegations.