Record-Breaking Quarter: Tether and Coinbase Achieve Historic Financial Milestones

Tether, the issuer of USDT, which currently has a market value exceeding 110.5 billion USD and holds more than 70% of the stablecoin market share, achieved a net profit of 2.85 billion USD in the fourth quarter of last year, and has accumulated record-high excess reserves amounting to 5.4 billion USD.

On the 1st, Tether released its first quarterly Comprehensive Reserve Report (CRR) issued by BDO, one of the top five global accounting firms, achieving growth again in important metrics such as excess reserves and net profits.

Tether's Q1 net profit reached a new high of 4.52 billion USD The reserve report shows that Tether's net profit for Q1 set a new historical high at 4.52 billion USD, with approximately 1 billion USD deriving from net operating profits from holding U.S. Treasury bonds. The remaining 3.52 billion USD includes the company's earnings calculated at market prices from its Bitcoin and gold holdings.

Since Tether announced that it would invest 15% of its net profits in Bitcoin to diversify its stablecoin reserve assets, Tether now holds 75,354 Bitcoins valued at over 4.5 billion USD, making it the 8th largest Bitcoin holder. This represents 4.87% of the USDT reserves, up from 2.9% last quarter.

Source: Tether

Moreover, the report stated that Tether has invested over 5 billion USD in various sectors including artificial intelligence and data, renewable energy, P2P communications, and BTC mining. On April 18th, Tether announced the establishment of four new independent business divisions, including a strategic technology investment division (e.g., AI, P2P), digital asset services division (e.g., tokenization platforms), sustainable Bitcoin mining and energy division, and a cryptocurrency education and transformation promotion division, expanding new businesses beyond the USDT products and hoping to provide a range of infrastructure solutions to break traditional systems.

Tether has previously declared that these investment amounts do not originate from USDT reserves, meaning that losses from such investments will not affect USDT.

USDT Excess Reserves Reach 6.26 Billion, Treasury Reserves Surpass 90 Billion Regarding USDT reserves, Tether's reserves amounted to 110.289 billion USD, with the total liabilities for issued USDT at 104.027 billion USD, of which 104.019 billion USD serves as collateral for issuing USDT.

This implies that USDT's total excess reserves now stand at 6.26 billion USD, an increase of 0.86 billion USD from last quarter, setting another historical record.

Among the USDT reserves, cash and cash equivalents total approximately 92.7 billion USD, still maintaining a high ratio of 90%, with the vast majority invested in U.S. Treasury securities amounting to 90.87 billion USD.

Tether also disclosed for the first time that as of March 31st, its net assets (total assets minus total liabilities) were 11.37 billion USD, a significant increase from the 7.01 billion USD net assets at the end of December last year.

Source: Tether

On Thursday, May 2, after the U.S. stock market closed, Coinbase released its financial results for the first quarter of the fiscal year 2024. The financial report showed that the company achieved a revenue of $1.64 billion, exceeding the expected $1.34 billion, and representing a year-over-year increase of 113%. Supported by $737 million in unrealized gains from holding cryptocurrencies, Coinbase achieved a net profit of $1.18 billion in the first quarter, marking its second consecutive profitable quarter and turning from a loss to a profit compared to the same period last year, which saw a loss of $78.9 million.

Following the announcement of the financial report, Coinbase's stock price increased by 2.25% in after-hours trading. Since the beginning of the year, the company's stock price has risen by more than 45%.

Source: Google Finance

Trading income doubled, custody income doubled

Looking at the types of revenue, as the main source of revenue, Coinbase's consumer trading income for this quarter was $935 million, more than doubling from the same period last year, and total trading income nearly reached double that of the same period last year, at $1.08 billion.

Additionally, subscription and service income for the quarter reached $511 million. Of this, custody income for the quarter rose to $32.3 million, nearly doubling from the same period last year. It is reported that Coinbase provides Bitcoin custody services for 8 out of 11 Bitcoin ETF issuers.

Other income for the quarter, including company interest, was recorded at $48.9 million, up 38% year-over-year.

Source: Coinbase

Bitcoin ETFs drive surge in trading volume and service demand

Earlier this year, the U.S. Securities and Exchange Commission (SEC) approved a Bitcoin spot ETF for the first time in history. The subsequent approval of 11 ETFs stimulated a massive influx of institutional investors, raising over $50 billion in funds.

Thanks to the issuance of ETFs stimulating trading behavior, Coinbase Prime, as a custodian partner of the exchange-traded funds, saw its trading volume reach a new historical high in the first quarter, up 115% year-over-year to 312 billion transactions, with quarterly revenue skyrocketing from $22.3 million in the same period last year to $85.4 million, and loans surged to $797 million.

Source: Coinbase