Tether Records $4.52 Billion Profit in Q1 Despite Declining Market Share

By: Eliza Bennet

Stablecoin issuer Tether (USDT) reported a record net profit of $4.52 billion in Q1, despite observing a significant decrease in market share. The major source of this impressive profit came from holdings in US Treasuries, supplemented by its Bitcoin and gold investments. The firm's treasury portfolio exceeded $90 billion in US Treasury bills, causing its surplus reserve to increase by $1 billion, reaching nearly $6.3 billion.

However, despite minting $12.5 billion in new USDT tokens in the first quarter, Tether has been experiencing a gradual decrease in its market share due to intense competition in the stablecoin market. Data shows that its market share on centralized exchanges has dwindled to 69% year-to-date. The company has faced mounting competition from stablecoins like FDUSD, which capitalized on Binance's zero-fee promotions, and USDC, backed by Circle, whose market share surged to 11%.

There is also a noticeable shift towards innovative yield-bearing alternatives like Ethena's USDe, which pose a threat to USDT's dominance. Despite these challenges, Tether's net profit and financial strength illustrate an unwavering commitment to transparency, stability, liquidity, and responsible risk management.