The number one stablecoin by market cap has announced it will reach $1.6 billion in excess reserves of Tether (USDT). The firm estimates this figure for the March quarter.
Tether Chief Technology officer Paolo Ardoino disclosed that it expects an estimated $700 million in profit within the said period pushing the reserves higher. Ardoino further revealed that this money would remain in Tether to support USDT capitalization.
Tether Expects to Make More Profit this Quarter
In a CNBC report, the Tether CTO revealed that the firm made $700 million in December 2022 quarter. According to the report, Tether’s assets exceeded its liabilities during the quarter. Notably, after subtracting the liabilities from its assets, the company had $960.6 million left.
While speaking with CNBC, Ardoino stated that Tether’s excess reserve will record an additional $700 million this quarter. The figure will supposedly push the reserve to $1.66 billion marking the first time it achieves a figure above $1 billion.
Regarding how Tether makes money, users pay a $1,000 withdrawal fee; the minimum amount a user can withdraw is $100,000. Secondly, Tether reportedly makes money by investing in precious materials and digital tokens. It also issues loans to many institutions, thereby earning interest.
Moreover, the challenges USDC faced when Silicon Valley Bank (SVB) crashed also pushed up USDT usage. Recall that Circle announced it had $3.3 billion of its USDC reserve stuck in SVB.
After the announcement, USDC de-pegged from the USD, causing panic and a selling frenzy among investors. Many USDC holders moved their coins to USDT, exchanging them even below the market value to cut costs.
The loss in USDC
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Author: Savannah Fortis
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