Stablecoin issuer Tether Holdings purchased 8,888 bitcoins in the first quarter
and added assets worth $735 million to its reserves on Tuesday, receiving the latest attestation report.
According to data from blockchain data platform Arkham Intelligence, three months ago, Tether filled its reserves with bitcoins worth $777 million.
Meanwhile, Tether reported a record profit of $4.5 billion for the first quarter, with $1 billion flowing from a large holding of U.S. Treasury securities in a new attestation report.
The company, headquartered in El Salvador, stated that it now holds $90.87 billion in U.S. Treasury securities as of early 2024, according to data.
The company indicated that the remainder of its profit comes from market-to-market gains on its bitcoin and gold holdings. In its reserves, including cash equivalents and other investments, Tether stated it holds $5.4 billion in bitcoin and $3.65 billion in gold.
The company announced that in May 2023, it will allocate up to 15% of its net realized operating profit to the world’s largest cryptocurrency. At that time, the value of its bitcoin holdings was approximately $1.5 billion.
In the first quarter, precious metal prices hit new records. Futures contracts for precious metals also rose by over 19%, marking the best quarterly extension since 1986, according to Barron’s.
According to data from cryptocurrency data provider CoinGecko, the price of bitcoin fell by 12% during the same period, indicating that gold played a significant role in what Tether described as a new high watermark.
In addition to the total value of approximately $144 billion in stablecoin assets, the company issued gold-backed tokens valued at $780 million. According to the website, the gold tokens can be redeemed for actual gold.
Over the years, Tether has issued attestation reports while competitors and critics have pointed out that they lack audited financial statements. Tether CEO Paolo Ardoino told Reuters that conducting a comprehensive audit is a top priority for the company.
Stablecoins are digital assets pegged to the price of fiat currencies, such as the U.S. dollar. They are typically backed by a mix of cash and U.S. Treasury securities.
As lawmakers debate stablecoin legislation on Capitol Hill, this could provide a record profit for the legislative framework of U.S. stablecoins.
The bill may also force Tether, which is not based in the U.S., to comply with anti-money laundering rules. According to the language of the bill, JP Morgan analysts are also considering that Tether may have to change the structure of its reserves supporting its leading stablecoin.
These details may ultimately lead to debates among legislators on Wednesday, when the House Financial Services Committee will mark up the so-called stablecoin bill.
Edited by James Rubin
