Tether, a stablecoin issuer, has announced that it made a profit of $1.48 billion in the first quarter of 2021. The company attributed this profit to increasing interest rates, which helped it earn higher returns on its reserves. In a press release, Tether stated that it has both gold and Bitcoin in its reserves, with approximately 4% of the reserves in gold and 2% in Bitcoin. Tether now holds surplus reserves of $2.44 billion, a record high for the company.
Consolidated Total Assets and Reduced Reliance on Bank Deposits
According to Tether’s press release, the company now holds $81.8 billion in consolidated total assets, with the majority held in US Treasury Bills. The company has also worked to reduce its reliance on pure bank deposits. Tether added that its reserves are “extremely liquid,” with approximately 85% held in cash, cash equivalents, and other short-term deposits.
Increased Number of Tokens in Circulation
Tether reported that it had increased its number of tokens in circulation by 20% during the quarter, which it believes is a clear indicator of its customers’ trust. The company stated that this allows it to be “very optimistic for the future.”
Stablecoin Issuers and Profitability
Stablecoin issuers like Tether typically earn money from interest received on their reserves. Tether does not pay interest on its USDT token holdings, which means that the company can pocket larger profits as interest rates rise.
In conclusion, Tether’s profit and diversification of its reserves are positive signs for the company’s future. The increased number of tokens in circulation and reduced reliance on bank deposits also indicate the company’s growth and success. As interest rates continue to rise, Tether’s profitability may continue to increase.
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