Crypto Company Tether - Issuer of Stablecoin Tether - Tether CTO Paolo Ardoino told Cointelegraph at Paris Blockchain Week 2023 that a profit of $700 million is expected in the first quarter of 2023, on par with the last quarter of 2022 .
“I don’t have the final numbers yet, but this quarter’s profit will likely be on par with the last quarter of 2022,” Ardoino said, adding that in the fourth quarter of 2022, Tether generated $700 million in profit. He added that Tether also has “an additional $950 million” on Dec. 31, 2022, noting: "So that means our equity in the company will grow to $1.5 billion or $1.7 billion on top of the reserves we have, which are backing 100% of the assets."
The Tether executive went on to say that USDT is becoming “the safest asset in the world to hold” because the company is different from banks based on a fractional reserve model. He explicitly referred to the ongoing crisis in the U.S. banking system, with banks such as Silicon Valley Bank (SVB) failing due to problems with the fractional reserve model.
Ardoino also mentioned that he is a fan of the major cryptocurrency Bitcoin, which is a Tether hedge, states: "I like bitcoin, that's our hedging tool, that's why we invested in bitcoin, because we don't trust people who take such a big risk on customer deposits." As previously reported, Tether slashed 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 also replaced those investments with U.S. Treasury bills.
The news comes as Tether continues to strengthen its market dominance, adding around $8 billion to USDT’s market capitalization since Feb. 28. At the time of writing, USDT’s market capitalization hit $79 billion, the highest level since May 2022, according to data from CoinGecko. While USDT’s market dominance rises, Circle’s rival stablecoin USDC, It has been losing market share, with its value down 18% since the end of February.
Circle faced major issues as it was affected by the SVB debacle, with the USDC stablecoin briefly losing its 1:1 peg to the U.S. dollar. The stablecoin was then re-pegged when Circle announced Cross River as a new banking partner and expanded its relationship with BNY Mellon.
