Tether Reports Record Profits with $5.2 Billion in Net Operating Profit in the First Half of 2024
Tether has once again demonstrated its robust financial position by closing the second quarter with an impressive $1.3 billion in net operating profits, as per the latest report released by the company. This profit brings Tether’s total net profit for the first half of the year to a staggering $5.2 billion.
- Tether currently holds $4.7 billion worth of Bitcoin and $3.8 billion in gold.
- This profit marks a significant increase from previous quarters, which stood at around $4.5 billion based on Tether’s Q1 report.
- Along with net profit, Tether’s group equity saw a significant rise of $520 million in Q2 of 2024, reaching a total of $11.9 billion.
“Tether continues to shatter records with a new profit benchmark of $5.2 billion for the first half of 2024,” stated Paolo Ardoino, CEO of Tether. “With Tether Group’s own equity reaching $11.9 billion, Tether has achieved an impressive and unmatched financial strength enabling it to continue leading the stablecoin industry in stability and liquidity.”
Big is Getting Bigger
The majority of Tether’s revenue is derived from investments in traditional asset classes, primarily U.S. Treasuries, including both direct holdings and indirect exposure. The Treasury portfolio has surged to approximately $97.6 billion, positioning Tether as one of the top 20 holders of U.S. Treasuries. This is a significant increase from the reported over $90 billion in Treasury holdings previously.
While U.S. Treasuries remain a core investment, Tether also diversifies its portfolio by holding Bitcoin and gold. The company, behind the world’s largest stablecoin, currently holds around $4.7 billion in Bitcoin and $3.8 billion in gold.
According to data from CoinMarketCap, Tether’s USDT continues to dominate the stablecoin market in terms of market capitalization. During Q2 of 2024, over $8.3 billion in USDT was issued by the company.
Part of the Q2 profits were reinvested by Tether in strategic projects aimed at supporting the ecosystem. In addition to core stablecoin operations, Tether has made strategic investments in various sectors, including AI, renewable energy, and Bitcoin mining.
Earlier this year, Tether allocated approximately $500 million for expansion into Bitcoin mining, with plans to establish mining facilities in countries such as Uruguay, Paraguay, and El Salvador. The goal is to decentralize Bitcoin mining and increase the mining capacity to 1% of the Bitcoin network’s hashrate by 2025.
In May, Tether announced a $150 million investment in Bitdeer, a significant player in the cryptocurrency mining sector. The agreement involves Tether’s support for Bitdeer’s data center expansion and new mining technology development, showcasing Tether’s commitment to enhancing its operational capabilities in Bitcoin mining.
Competition From USDC
Recent data from CCData reveals a continuous surge in the stablecoin market capitalization for ten consecutive months, surpassing $164 billion as of July 2024.
With the growing market cap comes an increase in dominance. Stablecoins now represent nearly 7% of the overall cryptocurrency market, although stablecoin trading volumes experienced an 8.35% decrease in July, possibly influenced by factors such as MiCA regulations and exchange activities.
While USDT remains the largest stablecoin with a market dominance of 69.6%, it has seen significant growth in market cap and trading volume. The second-largest stablecoin holds 73.5% of the market share among the top 10 stablecoins.
USDC has been gaining traction on the Solana blockchain, overtaking USDT in trading volume. Its strategic partnerships and initiatives, like Solend (now Save), Superteam, Circle’s Cross Chain Transfer Protocol (CCTP), and Circle’s Web3 Services, have contributed to its strong presence on Solana.
Moreover, USDC’s early compliance with MiCA regulations has boosted its trading activity on centralized exchanges, showcasing the impact of regulatory compliance on stablecoin activities. While the current MiCA regulations have had minimal impact on USDT’s dominance, the landscape may evolve over time. Tether’s non-registration as a stablecoin issuer under MiCA means it cannot legally operate or provide services to EU residents under the new regulatory framework.
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