- Tether has reported over US$5B in net profits, mostly thanks to investment in yield-bearing assets like US Treasury Bills.
- The company has more US debt than Germany, with over US$97B.
- While it dominates the US market, Tether has had issues in Europe as the company hasn’t been able to secure licenses and comply with the MiCA framework.
The largest stablecoin issuer Tether (USDT), has recorded over US$5B (AU$7.65B) in net profit for the first half of 2024, the company said in a press release.
The company reported a net profit of US$5.2B (AU$7.96B) during the first half and over US$1.3B (AU$2B) in the second quarter of the year, with a chunk of those profits reinvested in “strategic projects” to support the USDT ecosystem. Likewise, over $8.3B (AU$12.7B) in USDT was issued in the second quarter.
Related: Tether Taps Former Chainalysis Economist to Boost Transparency in Stablecoin Operations
Simon Dedic, founder and CEO of Moonrock Capital, shared a screenshot breaking down Tether’s reserves by category, showing over $80B (AU$122B) in US Treasury Bills alone.
So [Tether] announced their record breaking $5.2 billion earnings for the first half of this year. Do you guys actually understand how huge this is? That’s almost 30 million USD a day. In profits. That’s probably more than most S&P500 companies have.
Simon Dedic, founder and CEO of Moonrock Capital
The stablecoin market saw a notable surge by the beginning of 2024, reaching US$160B (AU$245B)—a figure not seen since Q2 of 2022— shortly after the approval of spot Bitcoin ETFs and the resurgence of the crypto market. Tether is the largest stablecoin issuer with a market capitalisation of over US$114.5B (AU$175.2B).
Tether Falls Short in the European Market
USDT maintains a wide gap against its main competitors like USD Coin (USDC), the second-largest stablecoin with a market capitalization of over US$32B (AU$49B).
Tether might dominate the US market but falls short against Circle in Europe. This is mostly due to the fact that Tether’s Euro-pegged stablecoin, EURT, does not comply with the European Union law requirements, especially under the MiCA framework, which restricts the use and trade of non-compliant stablecoins.
However, EURT has not been banned yet, but Tether has had several issues in getting the respective licenses to become Electronic Money Institutions (EMIs). Even so, investors are shifting away from non-compliant stablecoins to use fully regulated ones.
Related: Stripe to Reintroduce Crypto Payments with USDC on Solana, Ethereum, and Polygon, Ending Five-Year Hiatus
This has caused EURT’s market value to plunge over 6% in the last month, with its market capitalisation falling to US$31M (AU$47.5M), according to data from DefiLlama.
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