Tether reported a net operating profit of $1.5 billion in the second quarter of 2026, marking a nearly 50% increase from its first-quarter earnings. Elevated yields on short-term US Treasuries served as the primary growth driver, with the Treasury portfolio consistently contributing the lion’s share of the company’s quarterly profitability.
By the end of June, circulating USDT surpassed $184.6 billion, up $446 million from the end of March. This milestone stood out amid broader crypto market conditions, pushing USDT’s market share past the 60% threshold and solidifying its dominance even as overall global stablecoin volume contracted during the quarter.
Reserves Swell, Loans Scaled Back
The key to Tether’s massive profitability lies in its backing asset composition. The vast majority of USDT collateral is held in short-term US Treasuries, repurchase agreements, and other liquid government assets. This Treasury accumulation strategy places Tether among the world’s largest holders of US government debt.
Beyond paper instruments, the company continues to aggressively buy hard assets. Throughout the second quarter, Tether added 14 metric tons of physical gold to its vaults, bringing its total physical gold reserves past 146 metric tons. These additions directly boosted its financial cushion, with excess reserves, calculated as total assets minus liabilities, growing to $4.11 billion as of June 30.
While its gold and Treasury holdings expanded, Tether chose to rein in risk exposure across its lending operations. The company reduced secured lending by $2.38 billion, representing a 15% cut to its total loan book within a single quarter.
Steering Clear of Soaring AI Stocks
With massive cash inflows, Tether has sharpened its investment focus. Tether CEO Paolo Ardoino stated that the company is allocating capital toward financial inclusion technologies and AI infrastructure for underserved populations, actively steering clear of chasing publicly traded AI stocks with soaring valuations.
Ardoino’s stance reflects the stablecoin issuer’s preference for backing infrastructure aligned with its long-term vision. While many entities chase stock market euphoria, Tether has chosen to lock capital into safe short-term instruments and real-world tech initiatives, offering a clear look at how the manager of an $184 billion reserve deploys capital amid widespread market uncertainty.
Via Decrypt.
Read also: What Is DeFi (Decentralized Finance)?
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
