Launched in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner. Tether works to disrupt the conventional financial system via a more modern approach to money. Tether has made headway by giving customers the ability to transact with traditional currencies across the blockchain, without the inherent volatility and complexity typically associated with a digital currency.
Every $USDT is 100% backed by reserves, which includes traditional currency and cash equivalents, and may include other assets and receivables from loans made by Tether to third parties that allow to generate profits for the company. Infact Tether's Fourth Quarter Statement Reports Profit of $2.85 Billion and Sets New Records in Excess Reserves of Cash and Cash-Equivalent Supporting Tokens in Circulation. Net profit for 2023 for the Group is $6.2 billion, of which ~$4 billion represented the net operating profits generated by US Treasuries, Reverse Repo and Money market funds while the rest was generated through the performance of other asset classes. The Group achieved new record highs in ownership of US Treasuries too, with $80.3 billion exposure.
Why are its profits now breaking records? USDT today is approaching the $100 billion market capitalization. This means that there is more and more liquid assets to be invested in low risk assets. In addition to buying Treasuries, Tether has also purchased some Bitcoin and has also initialed long-term investments for mining. Diversifying investments for cash flow is crucial to mitigate risks and maximize returns. Investing across various asset classes like tether is doing, reduces the negative impact of specific events on a single sector. This strategy helps ensure a more stable cash flow over time, shielding investors from market fluctuations and providing profit opportunities in diverse economic scenarios.
Tether tokens exist as digital tokens built on several leading blockchains, including Algorand, Avalanche, Ethereum, EOS, Liquid Network, Omni, Polygon, Tezos, Tron and Solana. These transport protocols consist of open source software that interface with blockchains to allow for the issuance and redemption of Tether tokens.
All rights reserved.
Giorgia Bagnasco