The enviable state of Tether‘s quarterly profits, which recently surpassed $1 billion, utterly defies traditional business logic. With a relatively petite crew of 60 individuals, the company’s productivity per person is somewhat staggering. Skepticism, however, seems wholly justified given the brand’s somewhat murky history, fraught with half-truths and misrepresentation.
Nevertheless, Tether’s latest financial round-up presents a picture of robust health. The company now reportedly boasts a considerable cache of U.S. Treasuries, and a diminished portion of private debt. An investment in U.S. Treasury bills to the tune of $55.8 billion positions the company’s holdings just under Mexico and Thailand on an international scale – an achievement of sorts, no doubt.
In an odd tilt, however, Tether’s self-reported asset value of over $86 billion exceeds the market capitalization of its stablecoin, USDT. Although the precise nature of $2.4 billion, lumped under the heading of “Other Investments,” remains shrouded in mystery, it’s clear that Tether’s assets surpass its liabilities, thus leading the company towards a surplus.
Although these figures are tart, Tether’s confessed operational profits, soaring to a peak of over $1 billion within the span of just three months, stretch the bounds of belief. Yet, in light of its hefty holdings in U.S. Treasuries, this lucrative venture may not be as incredible as it first appears. Especially, when we consider the climbing interest rates over the last year, there’s little mystery surrounding Tether’s booming balance sheets.
That said, the company’s surprisingly minimal cash holdings raise an eyebrow or two. Having seen a major decline from $5.3 billion in December 2022 to a mere $90.8 million today, the company’s reduced liquidity may give future investors pause, particularly in the event of a potential rush for USDT redemptions.
Adding fuel to the fire of uncertainty, the company’s public relations facade remains under the shadow of an ongoing series of regulatory imbroglios within the U.S. This, despite the notable rise in profitability.
All things considered, it would be naive to take on faith the company’s attestation of its financial standpoint. There’s a stark difference between an official audit intended to unearth unseen irregularities and a mere attestation, which merely compares presented data against a stated purpose.
Though Tether‘s future profits and expansion plans may be a source of fascination for market watchers, it is this pervasive atmosphere of uncertainty that will continue to shape the discourse, at least for the foreseeable future. The confidence instilled by attestations, while welcome, simply doesn’t possess the gravitas of a full-fledged audit.
Source: Coindesk
