Tether 2024 Q2 Audit Report Released! What Else Can We See Besides Record Profits?

The leading stablecoin USDT issuer Tether announced the attestation for the second quarter of 2024 on July 31st, which can be found here. In addition to disclosing the company's financial condition, the report also provides the most important asset reserve report CFRRR for the stablecoin.

The following data is as of June 30, 2024.

Profit Hits Record High, Short-term U.S. Treasury’s Largest Holder in the Outlook for Next Year

In the first half of 2024, the profit reached $5.2 billion, hitting a record high, with a net operating profit of $1.3 billion. Tether Company stated: "This is mainly due to the strong and continuous income base from traditional asset classes, mainly U.S. Treasury bonds. Part of the earnings will be reinvested in strategic investments and the ecosystem."

Tether Will No Longer Invest in the Mining Industry

In the past, Tether's investments were mainly focused on mining companies and payment fields, but this time in the press release, it indicated that it is not considering further investments in areas such as Bitcoin mining and peer-to-peer communication technology. Tether has made four external investments this year. The most recent one was in early June with the Taiwan exchange XREX. The company's direct and indirect holdings in U.S. Treasury bonds exceed $97.6 billion, surpassing countries such as Germany, the United Arab Emirates, and Australia. It ranks 18th among countries holding U.S. Treasury bonds and ranks third in the purchase of 3-month U.S. Treasury bonds, following the UK and the Cayman Islands. Tether even stated in the official press release: "Considering the development of USDT, there is potential to rise to the top next year."

$5.3 Billion Excess Reserves, Diversified Investments Ensure Stable Asset Growth

In terms of token issuance, the second quarter saw USDT issuance of $8.3 billion. The current total market value is $114.4 billion, holding about 70% market share in the stablecoin market. The current net assets amount to $11.9 billion, holding around 80,000 bitcoins in addition to bonds, funds, corporate bonds, metals, and some cash. The most important part of the stablecoin's excess reserves is the $5.3 billion excess reserve fund that the company has prepared to ensure currency stability. Group equity increased by $520 million in the second quarter. Although the company currently holds a floating loss of approximately $653 million in bitcoin, it is partially offset by a floating profit of $165 million in gold. It is evident that the company has conducted risk management in its investment portfolio by holding stable assets such as gold to hedge against the risk of highly volatile assets like bitcoin.

Although the second-quarter accounting certification report seems all good, with stable income and record-high revenue, even claiming to become the largest holder of short-term U.S. bonds next year. However, Tether is currently caught between the EU MiCA proposal and the U.S. stablecoin bill. Perhaps survival through regulation, rather than rapid expansion, will be the next challenge for Tether.

As Circle becomes the first MiCA-compliant stablecoin issuer, will Tether's leading position be shaken?

Tether to Enter the RWA Market

Tether has previously announced plans to enter the real-world asset (RWA) market, and the CEO mentioned on 8/2 that the asset tokenization platform is about to finalize its name.