worldcoinindex.com
Tether Holdings Ltd., the company behind the largest stablecoin, has announced impressive financial results for the first quarter, reporting a record net profit of $4.52 billion. This surge in profit is primarily attributed to interest earnings from its substantial holdings of US Treasuries, alongside appreciation in Bitcoin and gold.
During this period, the market value of Tether's USDT token soared past $110 billion, fueled by heightened demand during the recent cryptocurrency bull market. Tether revealed that it issued over $12.5 billion USDT during the quarter, with approximately $1 billion of the profit stemming from "net operating profit," largely sourced from interest payments on Treasuries.
Stablecoins, designed to maintain a one-to-one value with fiat currencies like the dollar, are typically backed by cash and equivalents. Tether disclosed a significant increase in its ownership of Treasuries, surpassing $90 billion in the first quarter. The majority of its stablecoin reserves are held in Treasuries, generating profits through interest payments. Additionally, Tether reported gains from its holdings of Bitcoin and gold, with holdings totaling approximately $5.4 billion and $3.7 billion respectively at the quarter's end, as confirmed by third-party attestation.
Despite these successes, concerns persist regarding the quality of assets backing stablecoins like USDT, particularly regarding liquidity and resilience to market pressures. To address these concerns, Tether agreed in February 2021 to publish quarterly reports on its reserves as part of a settlement with US authorities.
In addition to its financial performance, Tether announced a notable increase in net equity, which stood at $11.37 billion at the end of March, marking a significant rise from $7.01 billion at the close of the previous year.
Furthermore, Tether revealed its strategic investment of $200 million in Blackrock Neurotech, a company specializing in brain-computer interface technology. The company's investment portfolio now stands at $5.1 billion, as stated in its quarterly report.