Tether’s Record Profit Raises Eyebrows Over Bitcoin Holdings
Tether Holdings Limited, the company behind the world’s largest stablecoin USDT, has reported a record profit of $5.2 billion for the first half of 2024. This achievement underscores Tether’s financial strength amid ongoing scrutiny and controversy.
Record Profits and Substantial Reserves
According to its latest quarterly attestation report, Tether’s reserves for its tokens total $118.4 billion, with liabilities at $113.1 billion. This report, audited by global accounting firm BDO, highlights Tether’s strong financial position despite the ongoing doubts about its transparency and stability.
Tether’s direct and indirect holdings of U.S. Treasury bills have increased to $97.6 billion, surpassing the Treasury holdings of several countries. During the second quarter of 2024, Tether issued $8.3 billion in USDT tokens and reported $5.3 billion in excess reserves. The company’s consolidated net equity stands at $11.9 billion as of June 30, 2024.
Discrepancies in Bitcoin Holdings
However, the report has raised questions about Tether’s Bitcoin holdings. The attestation shows Tether holding 75,354 Bitcoin in Q2 2024, the same amount reported in Q1. This consistency breaks a pattern of regular Bitcoin purchases by Tether and appears to contradict a statement from Tether CEO Paolo Ardoino, who claimed the company now holds 80,000 Bitcoin. This discrepancy has led to speculation about potential errors in the report or miscommunication within the company. Tether’s publicly disclosed Bitcoin wallet address shows holdings of 75,354 BTC, consistent with its Q1 attestation and unchanged since March.
Image source: Decrypt
Tether’s Controversial History
Tether’s impressive financial performance contrasts sharply with its tumultuous history and widespread skepticism. In 2021, Tether and its sister firm Bitfinex settled with the New York Attorney General’s office for $18.5 million over allegations of false statements regarding USDT’s backing. This settlement, along with ongoing debates about the full auditability of Tether’s reserves, has kept the company under intense scrutiny.
The skepticism around Tether peaked in 2022 following the collapses of cryptocurrency exchange FTX and stablecoin project Terra. Many industry observers predicted Tether would be the next major failure in the crypto market. However, Tether has not only survived these challenges but appears to be thriving based on its recent financial reports.
Market Impact and Future Prospects
Despite its success, Tether faces challenges in the European market. Its Euro-pegged stablecoin, EURT, does not comply with European Union law requirements, leading to a decline in its market value. However, Tether continues to dominate the US market, maintaining a significant lead over competitors like USD Coin (USDC).
Looking ahead, Tether’s strong financial performance and strategic investments in ecosystem projects suggest a robust future for the stablecoin issuer. As Tether continues to navigate regulatory challenges and market scrutiny, its commitment to transparency and stability will be critical in maintaining investor confidence and market dominance.
In conclusion, while Tether’s recent profit report showcases its financial robustness, the discrepancies in its Bitcoin holdings and its controversial past highlight the ongoing challenges and scrutiny it faces in the cryptocurrency market.
