Tether's 'Record-Breaking' Q4 Profit Partly Attributed to Gold and BTC Price Appreciation

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7 Feb 2024
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FINANCE
by Terence Zimwara
6 days ago

Tether's 'Record-Breaking' Q4 Profit Partly Attributed to Gold and BTC Price Appreciation


In the last quarter of 2023, Tether Holdings Limited registered a “record-breaking net profit of $2.85 billion.” Overall, the stablecoin issuer’s net profit in 2023 topped $6.2 billion. Tether’s secured loans ($4.8 billion), which are collateralized by highly liquid assets, were “fully covered by the undistributed accumulated profits known as excess reserves ($5.4 billion).”

Bitcoin and Gold Price Appreciation Contribute to Tether’s Record Profit

According to Tether Holdings Limited’s latest consolidated reserves report (CRR), the stablecoin issuer recorded a record-breaking net profit of $2.85 billion in the fourth quarter of 2023. Of this, $1 billion was generated from interest on Tether’s U.S. treasuries holdings, while the remainder was primarily from the appreciation of gold and bitcoin reserves.
Overall, Tether’s net profit in 2023 was $6.2 billion, with approximately $4 billion representing the net operating profits generated by U.S. Treasuries, Reverse Repo, and Money market funds. The remaining $2.2 billion was generated by other asset classes.
In addition to the positive financial performance, Tether Holdings Limited also experienced an all-time-high increase in excess reserves, which rose by $2.2 billion to close at $5.4 billion. As a result, Tether’s secured loans ($4.8 billion), which are collateralized by highly liquid assets, are “fully covered by the undistributed accumulated profits known as excess reserves ($5.4 billion).”


Commenting on the stablecoin issuer’s financial performance and the latest BDO attestation, Paolo Ardoino, the CEO of Tether, said:

Tether’s Q4 attestation underscores our commitment to transparency, stability, and responsible financial management. Achieving the highest percentage of reserves in Cash and Cash Equivalents 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, showcases our financial strength.

Ardoino also touted Tether’s investment in sustainable energy, bitcoin (BTC) mining, artificial intelligence (AI), and peer-to-peer technology as evidence of his firm commitment to an inclusive financial future.
What are your thoughts on Tether Holdings’ latest financial performance? Let us know what you think in the comments section below.

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Bitcoin, gold, Stablecoin, Tether, U.S. Treasuries, USDT


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Terence Zimwara

Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.


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FINANCE
by David Sencil
28 minutes ago

Blackrock's Bitcoin ETF Rockets to Top Five in 2024 ETF Inflows After Just 17 Days


Blackrock’s Ishares Bitcoin Trust (IBIT) has rapidly ascended to the upper ranks of the exchange-traded funds (ETFs) market, landing among the top five in terms of 2024 inflows in just 17 days, showcasing the burgeoning investor interest in cryptocurrency as a legitimate asset class.

Blackrock’s Bitcoin ETF Inflows Greater Than 99.98% of ETFs This Year

Blackrock’s Ishares Bitcoin Trust has ascended to the upper echelons of ETFs based on year-to-date inflows, landing a spot among the top five just 17 days post-launch.
Eric Balchunas, a senior ETF analyst at Bloomberg, highlighted this achievement on X, noting that IBIT had attracted more cash than 99.98% of ETFs, a staggering feat for a fund that’s barely over two weeks old. Some of this influx of investment can be attributed to a strategic shift among asset managers. Balchunas gives the example of Canadian asset manager Redwood, which transitioned from the Canadian Purpose Bitcoin ETF with fees greater than 1%, to the more cost-effective IBIT, which offers free management for the first $5 billion in assets and a modest 25 basis points fee thereafter.

Also $IBIT now in Top 5 in YTD flows, which means it’s taken in more cash than 99.98% of ETFs. Not bad for 17 days old. pic.twitter.com/ehAsZWRoqK
— Eric Balchunas (@EricBalchunas) February 6, 2024

IBIT has amassed $3.2 billion in inflows, outpaced only by heavyweight index ETFs like the Ishares Core S&P 500 ETF (IVV) and the Vanguard 500 Index Fund ETF (VOO), which cater to traditional equity markets. This places IBIT in an elite group, not just within the realm of cryptocurrency funds but across the broader ETF market.
Fidelity’s Wise Origin Bitcoin Fund (FBTC) also makes an appearance in the top 10 of ETF asset gatherers this year, securing the eighth position with $2.7 billion in inflows. However, despite the impressive start for these bitcoin-centric funds, the overall investment pace into new spot bitcoin ETFs has shown signs of deceleration.


Yet, Blackrock’s IBIT and Fidelity’s FBTC distinguish themselves as the only funds among their peers to have maintained a consistent positive flow of investment since their market debut. This achievement underscores the growing investor appetite for bitcoin as a legitimate asset class within diversified investment portfolios.
The performance of Blackrock’s ETF is particularly noteworthy, with Bloomberg’s Balchunas reporting a top 0.02% placement against an estimated 10,000 ETFs worldwide, a testament to the robust demand for cryptocurrency investment products.
The competitive landscape among spot bitcoin ETFs is becoming increasingly clear, with ARK 21shares and Bitwise trailing behind Blackrock and Fidelity in terms of accumulated flows. Meanwhile, Grayscale’s converted spot bitcoin ETF is experiencing a gradual reduction in outflows, suggesting a potential stabilization in the market.
As the landscape of cryptocurrency funds continues to evolve, the success of IBIT and its peers will likely serve as a bellwether for the future of digital asset investment.
Do you think that inflows into spot bitcoin ETFs will continue throughout this year? Share your thoughts and opinions about this subject in the comments section below.


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