Tether, the company behind the USDT stablecoin, announced record-breaking profits of $5.2 billion for the first half of 2024. This financial milestone reflects the company’s significant growth and expanding influence in the stablecoin market.
Massive US Treasury Holdings
According to Tether’s July 31 announcement, its US Treasury portfolio now stands at approximately $97.6 billion. This positions Tether’s Treasury reserve as larger than those of all but 17 world governments, including Germany, the United Arab Emirates, and Australia. Notably, Tether ranks third in the purchase of 3-month US Treasurys, following the United Kingdom and the Cayman Islands.
Tether’s growth in Treasury holdings highlights the increasing adoption of USDT, which the company asserts is backed 1:1 with liquid US dollar-denominated assets. The figures are based on an attestation by independent accounting firm BDO.
Market Capitalization and Net Equity
USDT’s total market capitalization is around $114 billion, slightly less than Tether’s total reserves of over $118 billion. Tether’s consolidated net equity, the total of all company assets minus liabilities, was reported at $11.9 billion as of June 30. In the second quarter, Tether issued approximately $8.3 billion in new USDT, which is continuously issued and redeemed.
A chart showcasing USDY and BUIDL’s market share of tokenized Treasury products. Source: Bluechip
Strategic Investments and Future Prospects
Paolo Ardoino, CEO of Tether, emphasized that the company’s robust balance sheet allows it to lead the stablecoin industry in both stability and liquidity. Tether has been reinvesting a portion of its profits into various sectors, including artificial intelligence, biotechnology, telecommunications, sustainable energy, Bitcoin mining, data infrastructure, P2P telecommunications technology, neurotech, and education.
Stablecoin Adoption and Market Trends
Stablecoins like Tether and its rival US Dollar Coin (USDC) are witnessing rapid adoption, driven largely by the demand for faster and more secure cross-border payments. Research firm Sacra projects that the volume of stablecoin payments could surpass Visa and exceed $4 trillion due to their “extreme product-market fit for cross-border money movement.”
In addition, the tokenized US Treasury market is gaining traction. Research strategist Tom Wan predicts it will reach $3 billion by the end of 2024, further cementing the role of crypto in driving demand for US Treasurys.
Overall, Tether’s impressive financial performance and strategic growth plans position it as a dominant player in the stablecoin sector, with significant implications for the broader financial landscape.
