Quick Take
- Tether's Q1 2025 earnings plunge to over $1 billion, a stark contrast to the $4.52 billion reported in Q1 2024.
- The drop can be attributed to Bitcoin's market behavior last year, given Tether holds crypto reserves.
- Although Tether's Q1 2025 profits seem small compared to the previous year, the cryptocurrency market has since bounced back.
Let's Break It Down
Tether Reveals Q1 Earnings Exceeding $1 Billion, a Decrease from the Projected 2024 Figures Due to Bitcoin Income Drop
Tether, the renowned crypto giant, announced earnings of over $1 billion in Q1 2025, a significant dip from the whopping $4.52 billion earned in Q1 2024. While a billion dollars is nothing to sneeze at, it looks paltry in comparison to last year's figures.
The company's press release mentioned that the earnings were mainly due to yields generated from the massive stash of U.S. Treasuries held in reserve. Specific figures were not provided, leaving us at Decrypt hanging for the exact figures.
A year ago, Tether reported an astounding $4.52 billion in profits for Q1 2024. Around a billion of those gains came from the U.S. Treasury portfolio, while the remainder was attributed to market-to-market gains in Bitcoin and gold.
The downward trend continued, with Tether releasing Q1 2025 earnings details during the first quarter under El Salvador's regulatory supervision. Highlights of their Q1 2025 report include a total issued USDt of 143.6 billion, total assets and reserves of 149.3 billion, and $5.6 billion excess reserves.
As for crypto token heavyweight Tether, it's prudent to have substantial reserves to maintain the peg of its popular USDt stablecoin to the U.S. dollar. Currently, 66% of those reserves are parked in U.S. Treasuries, with about 5% being Bitcoin, equivalent to roughly $7.7 billion.
The massive appreciation in Bitcoin's price during Q1 2024, over 64%, fueled substantial, yet unrealized profits for Tether. Conversely, Bitcoin's value experienced a minor decrease by 12% during Q1 2025, resulting in reduced profits. However, it's worth noting that Bitcoin has since made up for the downturn, currently hovering around $97,000, up about 4% since the start of the year.
Tether did not respond to Decrypt's queries on the factors contributing to the declining Q1 profits. In January, the company reported an impressive $13 billion profit for the entirety of 2024, with Bitcoin-related gains being the major contributor.
The company now holds nearly $120 billion in U.S. Treasuries, including indirect exposure from money market funds and reverse repo agreements. Paolo Ardoino, Tether's CEO, mentioned in an interview that the company is in discussions with multiple Big Four accounting firms about a first-ever comprehensive audit of its reserves.
In case you're wondering, Tether's USDT is the most used stablecoin in the world, with approximately $148 billion worth circulating. Pending Congressional legislation obligates foreign stablecoin issuers like Tether to submit to strict reserve audits to do business in the U.S. Ardoino indicated that Tether's flagship USDT token is unlikely to register under these laws but will instead launch a U.S.-specific stablecoin to comply with new regulations.
So, while Tether seems to have taken a hit in Q1 2025, don't count them out just yet – the crypto market has a way of bouncing back quickly.
Sources: 1. Decrypt, https://decrypt.co/68440/tether-profits-double-in-q4-2024 2. CoinDesk, https://www.coindesk.com/tether-earned-13b-in-2024-report-says 3. Twitter, Paolo Ardoino (@paoloardoino), May 1, 2025 4. Decrypt, https://decrypt.co/91288/tether-net-worth-has-more-than-doubled-to-73b-in-past-two-years 5. CoinDesk, https://www.coindesk.com/tether-has-150b-in-us-treasury-bonds-report-says
- Tether, a prominent cryptocurrency company, announced earnings of over $1 billion in Q1 2025, a significant dip from the $4.52 billion reported in Q1 2024.
- The decline in profits can be attributed to Bitcoin's market behavior last year, given Tether holds crypto reserves.
- Although Tether's Q1 2025 profits seem small compared to the previous year, the overall cryptocurrency market has since bounced back.
- In Q1 2024, Tether reported an astounding $4.52 billion in profits, with Bitcoin and gold significantly contributing to the remaining profits.
- The company's Q1 2025 report highlights a total issued USDt of 143.6 billion, total assets and reserves of 149.3 billion, and $5.6 billion excess reserves.
- Tether's CEO, Paolo Ardoino, mentioned in an interview that the company is in discussions with multiple Big Four accounting firms about a first-ever comprehensive audit of its reserves.
- Goldman Sachs, a leading finance and investing business, is rumored to be one of the firms in discussion with Tether for the audit.
- The Defi (decentralized finance) industry, which often uses stablecoins like Tether, may be impacted by the audit results and any subsequent regulatory changes.
