Tether Holdings Limited published its assurance opinion for Q2 of 2023, highlighting a $850 million rise in excess reserves to reach $3.3 billion. The report shows that Tether has been adding on its treasury reserved holding for USDT tokens. The report is the first time the company has disclosed its indirect exposure to United States Treasury bills held by money market funds, where it holds about $72.5 billion.
Tether operational profits go up 30% from Q1 2023
Tether’s report also highlighted its operational profitability at $1 billion from April to June 2023, with a 30% rise over Q1 2023. The enhanced quarterly performance results from a broader upturn in the cryptocurrency markets, sparked by the recent consolidation of Bitcoin around the $30,000 level.
According to the Q2 report, 85% of Tether’s reserves are in “liquid” investments, including cash and currency equivalents. The most recent reserve attestation for Tether puts the value of its total assets at $86.4 billion. The estimated $83.17 billion in outstanding liabilities for the active USDT coins belong to Tether.
The report also reveals that Tether’s stockholders would repurchase $115 million worth of its stock to “strengthen” the company. The second quarter’s profits have also gone toward “other investments in energy-related initiatives.” The company explains that energy-related efforts are not included in its attestation report because it does not view the investment as a viable reserve for circulating tokens.
Tether CTO Paolo Ardoino explained that transparency is the cornerstone of their concept, and they are committed to embracing accountability, improving risk management and security, and setting an example. As a result, he says, Q2 saw a higher-than-average level of USDT token circulation.
Earlier, Ardoino disclosed that the company’s holdings of the U.S. Treasury bills were equal to those of sovereign states like Mexico. In the aftermath of FTX’s bankruptcy and the failure of bitcoin lending companies like Three Arrows Capital, Tether has sought to redistribute profits to accumulate extra reserves. The extra funds, however, do not include the 100% reserves that Tether keeps on hand to redeem the USDT tokens that are currently in circulation.
Ardoino also noted that the decision to direct shareholder revenues toward creating a sizable excess reserve was motivated by the fact that market participants with undercollateralized assets or activities have produced weak points in the larger cryptocurrency ecosystem.
USDT dominates the stablecoin market
In July, the market capitalization of Tether USDT rose to new highs. According to on-chain analytics startup Into the Block, the stablecoin is slowly getting closer to the $84 billion threshold.
According to statistics from DeFiLlama, USDT’s market cap has increased by almost $480 million since the start of July, suggesting that adoption is rising. The overall market share value of the stablecoin has generally increased in 2023, rising from $66.23 billion on January 1 to its present value of $83.80 billion. The circulating supply of USDT has also climbed by almost 30% this year.
Since the year’s beginning, the stablecoin market has experienced a significant fall, losing roughly $12.17 billion. However, USDT has grown strongly, gaining a market worth of almost $17 billion. DeFiILama figures show that Tether controls two-thirds of the stablecoin market, increasing its market share by nearly 19% in 2023.
