• Tether Holdings Ltd is expected to make $700 million in Q1 profit.
• USDC and BUSD have suffered misfortunes, allowing Tether to take advantage of the situation.
• The company keeps its reserves backed by short-dated US Treasury Bills held in trust by Cantor Fitzgerald.
Tether Expecting Profits
Tether Holdings Ltd, the blockchain fintech firm in charge of the issuance of USDT, is set to rake in a profit of $700 million for the first quarter of this year. This was confirmed in an interview by Tether’s Chief Technical Officer Paolo Ardoino. The total number of USDT in circulation topped $78 billion and has seen an 18% increase since the start of the year-to-date period.
Misfortune of Rivals
The misfortunes of two rivals, USDC and Paxos’s BUSD have contributed to these profits for Tether. USDC lost its peg earlier this month due to deep exposure to Silicon Valley Bank (SVB) which collapsed recently. Meanwhile, Paxos has been asked by New York Department of Financial Services (NYDFS) to stop issuing BUSD as it was sold as an unregistered security.
Reserves Backed By US Treasury Bills
In order to ensure their reserves are reliable, Tether now keeps hold of short-dated US Treasury Bills held in trust by Cantor Fitzgerald and looked after by Bahamia lenders Deltec Bank & Trust Ltd. and Capital Union Bank according to Ardoino.
Although USDT is a stablecoin, it can still be volatile as it responds well FUDs (Fear Uncertainty Doubt). This could be further compounded should the SEC interfere with their operations as they did with Paxos’ BUSD resulting in their closure temporarily.
Despite all these issues regarding stability, risks and SEC interference, Tether remains one of the most profitable cryptocurrency firms at present thanks largely to its current competitors’ misfortune coupled with solid reserve management practices