Tether has again proved its strong financial health as it closed the second quarter with $1.3 billion in net operating profits, according to the company’s new report. The gain brings Tether’s total net profit for the first half of the year to $5.2 billion.
Tether is holding $4.7 billion worth of Bitcoin and $3.8 billion in gold!
This profit marks an increase from previous quarters, which was at around $4.5 billion, Tether’s Q1 report shows. In addition to net profit, Tether’s group equity increased by $520 million in Q2 2024, reaching a total of $11.9 billion, the firm stated.
“Tether continues to shatter records with a new profit benchmark of $5.2 billion for the first half of 2024,” said Paolo Ardoino, CEO of Tether. “With Tether Group’s own equity reaching $11.9 billion, Tether has achieved an impressive and unmatched financial strength enabling it to continue leading the stablecoin industry in stability and liquidity.”
Big is Getting Bigger
The majority of Tether’s revenue comes from investments in traditional asset classes, primarily U.S. Treasuries, which includes both direct holdings and indirect exposure. Its Treasury portfolio has surged to approximately $97.6 billion, making it one of the top 20 holders of the U.S. Treasuries. In comparison, Tether reported over $90 billion in Treasury holdings.
While Treasuries are the core investment, Tether also holds Bitcoin and gold. As reported, the company behind the world’s leading stablecoin USDT, holds around $4.7 billion in Bitcoin and $3.8 billion in gold.
According to data from CoinMarketCap, Tether’s USDT is currently dominating the stablecoin market with a market capitalization. The company stated that over $8.3 billion in USDT was issued during Q2 2024.
Tether noted that part of the Q2 profits were reinvested in strategic projects to support the ecosystem. In addition to its core stablecoin operations, Tether has made strategic investments in various sectors, including AI, renewable energy, and Bitcoin mining.
Earlier this year, Tether earmarked approximately $500 million for its expansion into Bitcoin mining. The investment includes building mining facilities in countries like Uruguay, Paraguay, and El Salvador.
The firm aims to decentralize Bitcoin mining and increase its mining capacity to 1% of the Bitcoin network’s hashrate by 2025.
In May, Tether announced a $150 million investment in Bitdeer, a major player in the cryptocurrency mining sector. Under the agreement, Tether will support Bitdeer’s expansion of data centers and the development of new mining technology.
The deal is part of Tether’s ongoing efforts to enhance its operational capabilities in Bitcoin mining.
Competition From USDC
CCData’s recent report shows that the stablecoin market capitalization has surged for ten consecutive months. As of July 2024, the market cap exceeded $164 billion.
With market cap surge comes increasing dominance.Stablecoins now account for almost 7% of the overall cryptocurrency market. In contrast, stablecoin trading volumes decreased by 8.35% in July, potentially due to factors like MiCA regulations and overall exchange activity.
USDT remains the largest stablecoin with a market dominance of 69.6%, but Circle’s USDC has seen substantial growth in market cap and trading volume. The second-largest stablecoin now accounts for 73.5% of the market share among the top 10 stablecoins.
USDC’s spotlight is on the Solana blockchain. It is the leading stablecoin on Solana, surpassing USDT in trading volume.
According to Bankless, USDC’s strong presence on Solana has been driven by its strategic partnerships and initiatives, like Solend (now Save), Superteam, Circle’s Cross Chain Transfer Protocol (CCTP), or Circle’s Web3 Services.
In addition, USDC’s early compliance with MiCA regulations has boosted its trading activity on centralized exchanges.
The impact of MiCA compliance is becoming more evident. While it shows little influence on USDT’s dominance, the situation may change over time. Tether has not registered as a stablecoin issuer under MiCA, meaning that the firm cannot legally operate or provide services to EU residents under the new regulatory framework.
