Tether, the company that issues and manages the USDT stablecoin, released its fourth quarter 2023 assurance report yesterday, which analyzes the company’s financial performance and breaks down the assets held by the group as of December 31st.
The report, provided by the independent auditing company BDO, aims to reaffirm the accuracy of Tether’s Consolidated Reserves Report (CRR) conducted in March 2023.
In total, the Group led by Paolo Ardoino and Giancarlo Devasini generated profits of $2.9 billion in the last quarter, and $6.2 billion throughout the year, once again establishing itself as a true institution in the cryptocurrency sector.
Let’s see all the details below.
Summary
Tether’s Q4 2023 report: $2.85 billion in profits and excess reserves
The attestation report for the fourth quarter of 2023, published yesterday by stablecoin issuer Tether, shows a company in perfect financial stability with growing profits and reserves.
Specifically, Tether in Q4 of last year recorded a net profit of 2.85 billion dollars, of which 1 billion in net operating profits derived from interests on US treasury securities, and the remaining portion coming from the appreciation of assets such as Bitcoin and gold.
The excess reserves held by the company with operational headquarters in Hong Kong and legal headquarters in the British Virgin Islands have seen a record increase of 2.2 billion dollars, reaching a total of 5.4 billion dollars.
These latter have risen so much as to completely cover a over-collateralized loan (already guaranteed by token reserves) taken in the past for 4.8 billion dollars, on which their own community had expressed negative opinions.
Tether’s reserves exceed by $600 million compared to the “secured loans” that are part of the liabilities.
The Group also holds a strategic stake of 640 million dollars in various projects related to Bitcoin mining, AI infrastructure, P2P telecommunications, and other businesses.
In the report, no reserves have been included that have been consolidated in the VC arm of Tether, which operates completely independently from the USDT minting activity.
After the financial statement of the company was publicly released in cryptographic circles, many pointed out that in Q4 2023 Tether recorded more profits than the US banking giant Goldman Sachs (2.85 billion versus 2.01 billion).
The curious thing about all this is that Tether manages only 60 employees, while Goldman Sachs has a workforce of over 40,000 people in its team.
Summarizing the financial situation of the USDT stablecoin issuer at the end of 2023, we can conclude that a total of $6.2 billion in profits were generated during the year, with $4 billion coming from US Treasury securities, money market funds, and Reverse Repos, while the remaining amount was generated through the performance of other assets.
The group has accumulated large amounts of gold and bitcoin, along with other investments, reaching new historical highs on direct and indirect properties of the US bond sector.
Throughout the year, Tether has issued stablecoins backed by cash and equivalents for an impressive share of 90%, emphasizing its dedication to maintaining liquidity in its financial ecosystem.
The total assets of the company as of December 31, 2023 amount to 97 billion dollars, compared to liabilities amounting to 91.5 billion dollars. The AUM is 98.47 billion dollars.
The unstoppable growth of the stablecoin issuer
As we could see from last year’s report on Tether’s financial situation, the company confirms itself as a solid point in the cryptographic sector, capable of driving an entire industry with its performance.
The CEO of Tether, Paolo Ardoino, in this positive moment, has highlighted to his stakeholders the values that guide his company in achieving new goals:
“The fourth quarter certificate of Tether highlights our commitment to transparency, stability, and responsible financial management. Achieving the highest percentage of liquidity reserves and equivalent means reflects our dedication to liquidity and stability. The substantial net profits generated not only in the last quarter of the year but throughout the year, amounting to $6.2 billion, demonstrate our financial strength. Furthermore, our investments in sustainable energy, Bitcoin mining, data, AI infrastructure, and P2P telecommunications technology illustrate our commitment to a more sustainable and inclusive financial future.”
The stablecoin manager doesn’t seem to want to stop even after an incredible quarter in terms of profits: two days ago, the news arrived that the Group has printed another billion USDT, adding more marketcap to its flagship cryptocurrency.
As highlighted by Bloomberg, famous entrepreneur and investor Anthony Pompliano, Tether has grown so much in recent years to become the 16th largest holder of US Treasury bonds.
The company thus separates itself from mere recognition as a cornerstone of the crypto market, asserting itself as an essential part of the entire US financial economy.
The most incredible thing about all this is that Tether has established itself in just a few years, operating in a completely new and rapidly evolving sector, with an extremely small team, and having been attacked and criticized multiple times by numerous detractors.
In the report, a graphic has been published that exhaustively illustrates the financial evolution of the company starting from Q4 2022, demonstrating numbers in constant growth.
Compared to the end of 2022, the US Treasury bonds held by Tether are now over 31.9 billion dollars, the equivalent in cash is over 26.96 billion dollars, and the USDT tokens are over 25.5 billion units.
