Cryptocurrency company Tether, which issues the stablecoin USDT (USDT), expects to make a profit of $700 million in the first quarter of 2023, matching the profit of the last quarter of 2022, Tether CTO Paul Ardoino he told Cointelegraph at Paris Blockchain Week 2023.
โI don't have the final numbers yet, but this quarter's earnings will probably match those of the last quarter of 2022,โ Ardoino said, adding that in Q4 2022, Tether generated $700 million in profit. He added that Tether also has an โaddition to that $950 millionโ as of December 31, 2022, noting:
โSo it means our company capital will grow to $1.5 billion or $1.7 billion that comes on top of the reserves that we have that support 100% of the assets.โ
Tether CTO went on to say that USDT is becoming the โworld's safest assetโ because the company is different from banks that are based on the fractional reserve model. He specifically referred to the ongoing crisis in the US banking system, with banks like Silicon Valley Bank (SVB) collapsing because of its fractional reserve model.
Ardoino also mentioned that he had been a fan of the major cryptocurrency Bitcoin (BTC), which is the Tether hedge, stating:
"I love Bitcoin and that's our hedge and that's why we're in Bitcoin, because we don't trust those guys who took so much risk with customer deposits."
As previously reported, Tether was aggressively cutting back on its commercial paper backing last year, eventually reducing it to zero by the end of 2022. In addition to removing commercial paper from its reserves, Tether was replacing those investments with US Treasury bills.
The news comes amid Tether continuing to increase its dominance in the market, with the USDT market cap adding around $8 billion since February 28. At the time of writing this article, the market value of USDT brackets to $79 billion, which is the highest level since May 2022, according to data from CoinGecko.
While USDT's market dominance has been increasing, Circle's rival stablecoin USDC has been losing market share, with market capitalization down 18% since the end of February.
Related: Tether CTO at USDC depeg: 'Bitcoin maxis was right all along' | PBW 2023
Circle has faced significant problems due to its exposure to the collapse of SVB, with the stablecoin USDC briefly losing its 1:1 parity with the US dollar. The stablecoin later re-linked in the middle of Circle announcing Cross River as a new banking partner and expanding ties with BNY Mellon.
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