By
Temitope Olatunji
May 9th, 2024
Tether reported an excess equity of $5.4 billion and cash equivalent cover of 90% of all issued tokens during the fourth quarter of 2023.
Leading stablecoins issuer Tether Holdings Limited has spent significant sums of resources attempting to shed light on the liquidity of its blockchain-based tokens. In the latest quarterly update that was conducted by independent auditing firm BDO, the privately held company reaffirmed its solid reserves for all the issued stablecoins. According to the quarterly report, Tether added about $2.2 billion in excess reserves thus putting the total figure to an all-time high of around $5.4 billion.
The increase in excess reserves was largely aided by the record-breaking net profit of around $2.85 billion by December 31, 2023. Whereby approximately $1 billion of the net profit came from the interest accrued from the United States Treasuries and the remaining $1.8 billion was realized from the company’s Bitcoin (BTC) and Gold holdings.
“Tether’s Q4 attestation underscores our commitment to transparency, stability, and responsible financial management. Achieving the highest percentage of reserves in Cash and Cash Equivalents reflects our dedication to liquidity and stability..” Paolo Ardoino, the Chief Executive Officer of Tether, noted.
Tether and Q4’s Financial Statements
As of December 31, 2023, Tether held about 91.6 billion in blockchain tokens and consolidated total assets of at least $97 billion. Notably, the company largely held US treasuries of about 80.3 billion, Bitcoin’s worth approximately $2.8 billion, Gold worth around $3.5 billion, and other assets worth $5.6 billion. Furthermore, the company has heavily invested in sustainable energy, Bitcoin mining, data, artificial intelligence (AI) infrastructure, and P2P communications in a bid to ensure a sustainable and inclusive future.
Tether Q4/2023 attestation is out.
My summary:
– profit for the quarter: $2.85B, of which ~$1B in net operational profit (mainly US t-bill interests), ~$1.85B from gold and #bitcoin holdings.
– total profit for 2023: $6.2B.
– cash & cash equivalents cover now 90% of all… https://t.co/AXjDw33QTc
— Paolo Ardoino 🍐 (@paoloardoino) January 31, 2024
As for the whole year, Tether registered a net profit of around $6.2 billion and total loans of about $4.8 billion, which is covered in excess of the $5.4 billion in reserves. Worth noting that the company only has about $1.5 billion from venture capital investments to date.
Market Outlook
According to the latest on-chain data as of this publication, Tether (USDT) is the third largest digital asset by market capitalization as it has about $96.1 billion in fully diluted valuation (FDV). Additionally, Tether (USDT) has a reported daily average trading volume of approximately $41.5 billion, which indicates it is the most used trading asset. However, the company faces regulatory hurdles, especially from the fact that the United States Congress has not enacted clear laws defining stablecoins and digital assets. Additionally, Tether products face significant competition from other similar web3 companies like Circle (USDC), which recently filed for a US IPO, and other algorithmic stablecoins like Dai (DAI).