Tether on Track to Close Year with Over $10 Billion in Net Profits
The world’s biggest stablecoin issuer, Tether, is on track to close the year with more than US$10 billion in net profits, chief executive Paolo Ardoino said in an interview.
Stablecoin Demand Skyrockets Amid Cryptocurrency Rally
As Bitcoin and many other cryptocurrencies rallied to new all-time highs, demand for Tether’s USDT stablecoin – pegged to the US dollar – has skyrocketed. The token added nearly US$50 billion to its market capitalisation this year, and it now stands at more than US$140 billion, according to data tracker CoinMarketCap.
Tether’s Earnings Come from Investing Reserves
Much of Tether’s earnings come from investing its reserves backing stablecoins, including USDT, into US Treasuries, gold and other securities.
Investments in Rumble and Artificial Intelligence
This year, Tether invested more than half of its net profits. On Friday (Dec 20), the company announced it agreed to invest US$775 million into video-sharing network Rumble, including a primary commitment of US$250 million in cash, with Tether also supporting Rumble’s tender offer for up to 70 million shares at US$7.50 per share.
“Next year we plan to deploy at least half of the profits in investments” including in artificial intelligence (AI), Ardoino said. “Our investment is just at the beginning.” In the first quarter, Tether is planning to launch its own AI platform, making it possible for people to interact with AI using their cell phones, he said.
Other Investments and Future Plans
Tether has been investing in Bitcoin miners, biotech and other sectors.
The company continues to look at investments in the US, as regulation of crypto is expected to become more favourable under president-elect Donald Trump, Ardoino said. Howard Lutnick, whom Trump nominated to be commerce secretary, heads Cantor Fitzgerald, which purchased a stake in Tether and custodies the stablecoin issuer’s reserves. Lutnick is in talks to deepen financial ties between the two businesses, and has been discussing plans for a lending programme, Bloomberg reported earlier.
Conclusion
Tether’s impressive profits and investments demonstrate the company’s growing influence in the cryptocurrency market. With plans to deploy at least half of its profits in investments, including in AI, the company is poised for further growth and expansion in the coming year.
FAQs
Q: What is Tether’s net profit expected to be at the end of the year?
A: Tether is on track to close the year with more than US$10 billion in net profits.
Q: What has driven the demand for Tether’s USDT stablecoin?
A: The demand for Tether’s USDT stablecoin has skyrocketed amid the cryptocurrency rally, with the token adding nearly US$50 billion to its market capitalisation this year.
Q: How does Tether make its earnings?
A: Much of Tether’s earnings come from investing its reserves backing stablecoins, including USDT, into US Treasuries, gold and other securities.
Q: What are Tether’s plans for its profits in the coming year?
A: Tether plans to deploy at least half of its profits in investments, including in artificial intelligence (AI), with plans to launch its own AI platform in the first quarter.
