Criticized for years for its lack of investor transparency, the stablecoin Tether managed to survive both the stablecoin crisis and the contagion that bankrupted several giants one after the other.
In an announcement published this Thursday (9), the company that issues the stablecoin USDT points out that it posted a net profit of US$700 million (R$3.6 million) in the last quarter of 2022.
In other words, while the entire industry is suffering, going through mass layoffs, entering the recovery process, or simply shutting down, stablecoins are at their best.
The reason is good returns on US Treasuries. According to a Tether report, the company has US$39.2 billion (R$203 billion) in such assets, about 58% of all the money it manages.
Another one that is benefiting from the good time of fixed income is the USD Coin (USDC). Responsible for the second largest stablecoin in the market, Circle also reported millionaire profits in its latest quarterly report.
Tether survives another crypto winter
Shortly after the collapse of the stablecoin TerraUSD (UST) in May 2022, Tether lost $17 billion in market value due to mistrust in the market. Later, when FTX filed for bankruptcy in November, leaked talks indicated that Sam Bankman-Fried would try to lower the price of Tether so that it would lose its peg to the dollar.
Even with waves of looting and a contagion that bankrupted several giants, Tether managed to survive another winter and silence its critics.
“With the release of this latest report on consolidated reserves, Tether continues to deliver on our commitment to lead the industry in transparency”Paolo Ardoino, CTO of Tether, said in the note. “Following a tumultuous end to 2022, Tether has once again proven its stability, resilience, and ability to handle bear markets and black swan events and sets itself apart from the bad guys in the industry.”
Tether claims to have profited BRL 3.6 billion in the past quarter
Finally, the company also points to the changed plans, with the abandonment of investments considered to be higher risk and the focus on US government bonds.
“More than $700 million in net income added to Tether reserves in the last quarter of 2022.”
As seen above, the company is betting heavily on government bonds, which make up 58% of its cash. Then other highly liquid assets complete the list.
So while many have doubts about USDT, the stablecoin is proving to be financially sound, while several other giants are in trouble, including miners, exchanges, and billionaire funds.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
