Tether's Record Growth in 2023 Highlights Stablecoin Trust and Influence on Financial Systems
Summary:
In 2023, Tether reported a net profit of $6.2 billion, mostly generated from passive income via US Treasury securities. Despite wide market concerns, the firm increased its exposure to secure assets like short-term U.S. Treasurys, enhancing its financial position and risk profile. Tether's growth signifies rising trust in stablecoins and their potential to replace conventional financial services. Tether's successful year also highlights a tighter link between digital assets and the broader financial system. The news also covers Bitpanda's new institutional crypto platform, Coinbase's recruitment of former UK finance minister, and Global X's withdrawal of their Bitcoin ETF application.
In 2023, Tether, a prominent issuer of stablecoin, reported a hefty net profit of $6.2 billion, primarily gained from passive income derived from US Treasury securities that support its USDT stablecoin reserves. Tether managed to leverage the growing apprehension about the U.S. banking system and the possible chain reaction on other stablecoins, such as the USD Coin (USDC). Despite the surrounding fear, uncertainty, and doubt, Tether raised its stake in top-tier assets like the short-term U.S. Treasurys to support its stablecoin, globally known as one of the most secure assets. Profiting from the elevated interest rate circumstances, the firm was able to fortify its financial position and enhance its risk profile by supplementing a more secure asset as reserve reinforcement. The phenomenal growth of Tether in this turbulent year is indicative of a greater trust in stablecoins as a critical component in replacing conventional financial services with crypto-based substitutes. Stablecoins offer a rapid, efficient and frequently cost effective solution for financial transactions, especially for cross-border payments. Various cryptocurrency exchanges and lending platforms provide yields between 7% to 20% for stablecoin deposits. Tether’s performances highlight a stronger connection between digital assets and the broader financial system, suggesting that stablecoins could play a crucial role in the strength of the U.S. dollar in time to come.
Crypto Biz also put focus on Bitpanda's strategy of relying on institutional capital, more politicians joining the board of Coinbase, and withdrawal of Global X's application for a spot Bitcoin (BTC) exchange-traded fund (ETF). Tether Holdings, the firm behind the Tether (USDT) stablecoin, unveiled a "record-breaking net profit" in the final quarter of 2023, powered by Treasury interest and strong performance from other assets. Tether reported a net profit of $2.85 billion in Q4 2023, including around $1 billion in net interest from U.S. Treasury securities. Gold and Bitcoin reserves constituted the rest. Tether's total assets under management include U.S. Treasurys worth $80.3 billion, $2.8 billion in BTC, $3.5 billion in gold and $1.5 billion in venture capital investments.
Cboe BZX Exchange withdrew its application for approval to list shares of Global X's spot Bitcoin ETF from the U.S. Securities and Exchange Commission (SEC). The SEC announced that the Cboe BZX had rescinded the request to list and trade the shares of the Global X Bitcoin Trust. The trust was first filed in August 2023 and the commission had twice extended review of the proposal. The SEC approved spot Bitcoin ETFs for the first time on Jan. 10. As per data from Jan. 26, the Grayscale Bitcoin Trust experienced approximately $5 billion in withdrawals after its conversion into an ETF, while other approved ETFs collectively reported a positive net inflow of $759 million.
In response to the increasing demand in Europe for institutional crypto services, the Austrian fintech group, Bitpanda, is launching Bitpanda Wealth, an institutional-grade cryptocurrency trading platform. Targeting high-net-worth individuals, family offices, external asset managers and corporate treasuries, Bitpanda Wealth aims to provide services that facilitate crypto investment, management, and reporting, as well as leverage products, exchange-traded funds, commodities, and other assets. Bitpanda has received certification as a virtual asset service provider in several European jurisdictions, including Austria, Norway, Germany, France, Czechia and Sweden.
Coinbase Global has enlisted George Osborne, former United Kingdom Chancellor of the Exchequer, as an adviser. Osborne, who carries extensive experience in government and international affairs, served as Chancellor from 2010 to 2016 and was also a consultant to the world's largest asset manager, BlackRock, from 2017 to 2021. Amid escalating regulatory pressure Coinbase has been hiring former politicians. Osborne will join a host of notable political figures on Coinbase's Global Advisory Board.
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Published At
2/3/2024 12:30:00 AM
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