5 ms·

How did Tether profit $13B in 2024 from USDT?

22 points by wslh 1y ago

Mariah44 1y ago
[dead]
attogram 1y ago
Does USDC make profit in same range as USDT?
- pjjpo 1y ago
  Circle is the company managing USDC and is the one to watch for a similar number. They just IPO'd and will probably have more precise data in the next earnings report, but for IPO it seems they reported 2024 $1.5B revenue mostly from interest. I couldn't find holding percentages but as a founder of the token, we can assume much lies on Coinbase - they give a pretty good yield so any coins there will have fairly low interest income for Circle, and their revenue would be mostly coins moved off of Coinbase.
  - bb88 1y ago
    USDC is primarily holding a mix of treasuries and cash. It's unclear how much directly, but if you did some reverse engineering of the math, you could probably get a close idea. Since it's not regulated, the price can drop precipitously quicker than the stock market, so there's some risk calculation that determines their treasuries/cash split.
daveguy 1y ago
Does anyone trust these sketchy crypto ghouls to do right without serious regulation?
pinkmuffinere 1y ago
Maybe the post is correct, but it offers nearly no context or evidence for its claim. As a reader, if I already knew enough to validate that this article was worth trusting, I wouldn’t need the article. On the other hand, I am interested in the premise, but don’t know enough to tell if the article is true, and the article has no sources/evidence to back up its claim. I don’t think there is any situation in which such an article is useful, except as an “echo-chamber” kind of piece
nikanj 1y ago
What happens if enough people want to exchange USDT for actual USD? Tether goes down the same way SVB went down: Unable to offload long-term government bonds for full dollar value
- OutOfHere 1y ago
  It won't go down. It will merely break its dollar peg, dipping in value temporarily until the bonds mature, at which time it would restore its peg. Most people would be wise enough to not sell it at a dipped value if an independent audit report can confirm the Treasury backing.
  - bb88 1y ago
    If I buy a CD from a bank, it has a fixed APR and insured by the FDIC. If I buy a stock there's upside and downside, but regulated by the SEC. A stable coin has no upside and all downside.
    - OutOfHere 1y ago
      > A stable coin has no upside and all downside. That is completely false since the stablecoin legislation passed this year requires the issuer to hold adequate funds backing their issuance. The stablecoin is in effect regulated by the government.
      - bb88 1y ago
        There's still no FDIC for stable coins. If there's fraud, well, maybe you get your money back, maybe not. And there's still no interest to compensate for the risk of holding a stable coin.
        OutOfHere 1y ago
        Personally I treat stablecoins as suitable for temporary holding only. I move to real cryptocurrency as soon as possible, to the few that appreciate in the long term despite their pumps and dumps.
tristanj 1y ago
I’m convinced that in its early years, Tether operated as a scam, skimming deposits and creating coins out of thin air. But once they realized they had accidentally created a money-printing machine, they attempted to become legit and quietly buried the evidence of their past.
- bb88 1y ago
  Tether is still banned in NY, AFAICT (Maybe I'm wrong here). > But once they realized they had accidentally created a money-printing machine So that's a joke right? They on-purposely created a money-printing machine. But my god, the fraud was so profitable they needed a way to make it legit because no one wants to live in Panama.
- daft_pink 1y ago
  Are we sure they actually have the reserves?
  - wslh 1y ago
    I think at this point yes, if you follow their news it seems they see now as a big financial group that goes beyond crypto.
AvAn12 1y ago
$13b on $113b =12%. With treasuries that is only possible with massive leverage, negative convexity, or other reindeer games. I doubt the prospectus will tell much. Good luck to everyone involved but I personally am envisioning a ten foot pole and all that.
- oarla 1y ago
  13B it’s not entirely from treasuries. The breakdown is 7B from treasuries —> probably from the methods you described 5B from Gold —> believable if you notice how gold has done in 2024 1B from other sources. No idea what they are. The article mentions that tether may not have been audited by a third party. So I’m not sure how believable these numbers are.
scrubs 1y ago
Yah crypto has an ocd obsession with cash, usd, and actually valuable stuff like gov backed bonds. If crypto thought for a femto second they couldn't get the above crypto would self dissolve in 10 mins. These are the ends, the only ends that matter. The rest is means ... a side show.
OutOfHere 1y ago
Rationally it is silly to hold too much of a depreciating asset like a USD backed stablecoin because it loses value to inflation, also because it earns no interest. The value is in holding it briefly, exchanging it for appreciating risk assets, e.g. PAXG, BTC, XMR, ETH, etc. as soon as one is comfortable with the transition.
Mirgova8 1y ago
[dead]

22 points by wslh 1y ago

Mariah44 1y ago

[dead]

attogram 1y ago

Does USDC make profit in same range as USDT?

pjjpo 1y ago
Circle is the company managing USDC and is the one to watch for a similar number. They just IPO'd and will probably have more precise data in the next earnings report, but for IPO it seems they reported 2024 $1.5B revenue mostly from interest. I couldn't find holding percentages but as a founder of the token, we can assume much lies on Coinbase - they give a pretty good yield so any coins there will have fairly low interest income for Circle, and their revenue would be mostly coins moved off of Coinbase.
- bb88 1y ago
  USDC is primarily holding a mix of treasuries and cash. It's unclear how much directly, but if you did some reverse engineering of the math, you could probably get a close idea. Since it's not regulated, the price can drop precipitously quicker than the stock market, so there's some risk calculation that determines their treasuries/cash split.

daveguy 1y ago

Does anyone trust these sketchy crypto ghouls to do right without serious regulation?

pinkmuffinere 1y ago

Maybe the post is correct, but it offers nearly no context or evidence for its claim. As a reader, if I already knew enough to validate that this article was worth trusting, I wouldn’t need the article. On the other hand, I am interested in the premise, but don’t know enough to tell if the article is true, and the article has no sources/evidence to back up its claim. I don’t think there is any situation in which such an article is useful, except as an “echo-chamber” kind of piece

nikanj 1y ago

What happens if enough people want to exchange USDT for actual USD? Tether goes down the same way SVB went down: Unable to offload long-term government bonds for full dollar value

OutOfHere 1y ago
It won't go down. It will merely break its dollar peg, dipping in value temporarily until the bonds mature, at which time it would restore its peg. Most people would be wise enough to not sell it at a dipped value if an independent audit report can confirm the Treasury backing.
- bb88 1y ago
  If I buy a CD from a bank, it has a fixed APR and insured by the FDIC. If I buy a stock there's upside and downside, but regulated by the SEC. A stable coin has no upside and all downside.
  - OutOfHere 1y ago
    > A stable coin has no upside and all downside. That is completely false since the stablecoin legislation passed this year requires the issuer to hold adequate funds backing their issuance. The stablecoin is in effect regulated by the government.
    - bb88 1y ago
      There's still no FDIC for stable coins. If there's fraud, well, maybe you get your money back, maybe not. And there's still no interest to compensate for the risk of holding a stable coin.
      - OutOfHere 1y ago
        Personally I treat stablecoins as suitable for temporary holding only. I move to real cryptocurrency as soon as possible, to the few that appreciate in the long term despite their pumps and dumps.

tristanj 1y ago

I’m convinced that in its early years, Tether operated as a scam, skimming deposits and creating coins out of thin air. But once they realized they had accidentally created a money-printing machine, they attempted to become legit and quietly buried the evidence of their past.

bb88 1y ago
Tether is still banned in NY, AFAICT (Maybe I'm wrong here). > But once they realized they had accidentally created a money-printing machine So that's a joke right? They on-purposely created a money-printing machine. But my god, the fraud was so profitable they needed a way to make it legit because no one wants to live in Panama.
daft_pink 1y ago
Are we sure they actually have the reserves?
- wslh 1y ago
  I think at this point yes, if you follow their news it seems they see now as a big financial group that goes beyond crypto.

AvAn12 1y ago

$13b on $113b =12%. With treasuries that is only possible with massive leverage, negative convexity, or other reindeer games. I doubt the prospectus will tell much. Good luck to everyone involved but I personally am envisioning a ten foot pole and all that.

oarla 1y ago
13B it’s not entirely from treasuries. The breakdown is 7B from treasuries —> probably from the methods you described 5B from Gold —> believable if you notice how gold has done in 2024 1B from other sources. No idea what they are. The article mentions that tether may not have been audited by a third party. So I’m not sure how believable these numbers are.

scrubs 1y ago

Yah crypto has an ocd obsession with cash, usd, and actually valuable stuff like gov backed bonds. If crypto thought for a femto second they couldn't get the above crypto would self dissolve in 10 mins. These are the ends, the only ends that matter. The rest is means ... a side show.

OutOfHere 1y ago

Rationally it is silly to hold too much of a depreciating asset like a USD backed stablecoin because it loses value to inflation, also because it earns no interest. The value is in holding it briefly, exchanging it for appreciating risk assets, e.g. PAXG, BTC, XMR, ETH, etc. as soon as one is comfortable with the transition.

Mirgova8 1y ago

[dead]