Table of Contents
Key facts:
- The net profit for Tether in 2023 was $6.2 billion.
- USDT is backed by Treasury bills and loans, in addition to cash.
Tether Holdings Limited, the issuing company of the USDT stablecoin, has surpassed one of the Wall Street giants, Goldman Sachs, in profits in the last quarter of 2023.
The company announced this on January 31, after the most recent quarterly audit, carried out by the accounting firm BDO. In the report, it is revealed that in the fourth quarter of 2023, the record net profit was $2.85 billion.
Of that figure, $1 billion was in net operating profits, mainly from interest on US Treasury bonds. And, most of it, $1.8 billion, came from the appreciation of gold and bitcoin (BTC) reserves.
When comparing Tether’s profits with those recorded by the giant investment bank, Goldman Sachs, which were $2.01 billion in the same quarter, it is shown that the USDT issuing company surpassed it by 41%.
This has caught the attention of different players in the cryptocurrency industry because Goldman Sachs is one of the leading financial companies in the world. One of them has been Will Climente, the co-founder of Reflexivity Research, a cryptoasset market research firm for institutions.
“What’s even wilder” is that Goldman Sachs has 48,500 employees while Tether only has 60, Clemente said. Given this, he questioned: The highest profit/employee ratio?
The fact that Tether has outperformed an established financial giant like Goldman Sachs highlights the growing influence and acceptance of cryptocurrencies in the global financial system. Likewise, it shows that this industry, which some see as developing, already manages levels similar to large financial companies.
Tether’s annual profits were $6.2 billion
Tether also reported that the company’s excess reserves increased by $2.2 billion compared to the previous quarter, totaling $5.4 billion.
The company detailed that $640 million was invested in several “strategic projects” related to Bitcoin mining, artificial intelligence infrastructure, P2P telecommunications and others.
In total, the 2023 net profit for Tether Holdings Limited was $6.2 billion, of which $4 billion represented net operating profits generated by Treasuries, reverse repos and money market funds, while The remainder was generated through the performance of other asset classes.
As can be seen in the following infographic, the company reached an exposure of 80.3 billion dollars in direct and indirect ownership of United States Treasury bonds, followed by 2.8 billion in bitcoin, 3.5 billion in gold and 5.6 billion in other assets.
The company also continued to see positive contributions from all asset classes, especially gold, bitcoin and other investments. Tether issued tokens backed by 90% cash and equivalents.
This comes after, last November, the company won a legal victory in a lawsuit in which it was accused of resorting to “unethical practices”, questioning the validity of the reserves that back the stablecoin, as reported Money Investors.
With the dismissal of the lawsuit, a litigation that lasted a couple of years ended. However, some time ago, in February 2021, Tether had to pay a fine of $18 million to the New York Attorney General’s Office, an entity that accused it of offering services illegally and misleading about the support of the stablecoin.