Tether shovels $3B into US Treasuries despite profit slump—because nothing says ’stable’ like doubling down on government debt

Tether’s latest move: stuffing $3 billion into US Treasury bonds while profits slide year-over-year. Because when the crypto seas get choppy, nothing calms nerves like the ’full faith and credit’ of a nation printing trillions.

The stablecoin giant now holds more Treasury debt than some small countries—just as yields flirt with generational highs. Genius hedging, or desperate bid for legitimacy? The market won’t care... until it does.

Meanwhile, TradFi bankers clutch pearls over ’unbacked’ stablecoins—while their own balance sheets balloon with reverse repos and unrealized losses. The irony writes itself.

Profits down from record 2024 levels

Despite the increase in reserve assets, Tether’s operating profits fell year-over-year. The group reported $1 billion in operational profits for the first quarter, down from $4.52 billion during the same period in 2024. 

Last year’s first-quarter figure included $1 billion in net operating profit from US Treasuries, with the remainder attributed to mark-to-market gains on Bitcoin (BTC) and gold holdings.

This year’s lower profit comes amid relative stability in Treasury yields and a less favorable environment for crypto asset appreciation, particularly Bitcoin, which declined in value from $93,812 to $82,704 per BTC between quarters. 

Tether’s gold holdings increased in value, reaching $6.7 billion from $5.3 billion, partially offsetting crypto market volatility.

Tether reported total assets of $149.3 billion as of March 31, with liabilities of $143.7 billion, resulting in $5.6 billion in excess reserves. 

This is a decline from $7.1 billion in excess reserves as of the last quarter of 2024, likely due to a $2.3 billion dividend distribution during the first quarter.

USDT supply expanded by $7 billion during the quarter, reflecting ongoing adoption, particularly in emerging markets and on-chain finance applications. The number of wallets holding USDT increased by 46 million, a 13% quarterly increase.

Strategic investments and regulatory footprint

Beyond reserve backing, Tether continues allocating capital to long-term investments through its Tether Investments arm, now totaling more than $2 billion.

These investments span sectors such as renewable energy, artificial intelligence, and peer-to-peer infrastructure. These assets are not part of the company’s reserve base.

Last quarter also marked Tether’s first quarter operating under regulatory supervision in El Salvador following its official relocation. It now holds a license as a stablecoin issuer under the country’s digital assets framework and reports directly to El Salvador’s Financial Investigation Unit.

Tether’s expanding Treasury footprint continues to align it with traditional fixed-income markets, even as its quarterly earnings reflect the sector’s macroeconomic slowdown and narrower gains in the crypto market.