Unexpected Sources of Tether Profits: How the Company Makes Billions
Date: 2025-07-17 Author: Gabriel Deangelo Categories: BUSINESS
In 2024, Tether received over $13 billion in revenue, and in the first quarter of 2025 alone, operating profit exceeded $1 billion. At the same time, the company's main source of income is not fees or the issuance of stablecoins, but investments in US government debt securities (treasuries). By mid-2025, Tether had over $127 billion in such assets on its balance sheet.
Tether's model is simple: users deposit fiat money and receive USDT, after which the company invests these funds in reliable and liquid treasuries. Against the backdrop of high US interest rates, this strategy provides a stable and relatively safe passive income. It is important to note that treasuries are a much less risky instrument compared to stocks or derivatives.
In addition to treasuries, Tether diversifies its reserves. In Q1 2025, the company's portfolio also included precious metals (around 4.5%), Bitcoin (around 5.1%), and secured lending, which made up almost 6% of assets. Although these shares seem small, they significantly affect the company's overall profits.
Fees are another important element of Tether's revenue. Transaction fees are 0.1%, and a user verification fee of 150 USDT is charged. Despite its apparent modesty, USDT's popularity has allowed it to earn more than $120 million in fees weekly since the beginning of 2025, and since April, this figure has exceeded $130 million per week.
In addition, Tether enters into partnerships with companies from various industries. One of the latest was a contract with the Luxembourg firm Adecoagro, which specializes in food production and renewable energy. Together, they plan to develop mining in Brazil.
The factors that ensured Tether's revenue growth are related to three main points. First, the high level of interest rates in the US, which increased the yield of treasuries. Second, the scale of the business: USDT is the largest stablecoin by capitalization, significantly ahead of its competitors. And third, the legislative pressure on stablecoins remains relatively weak, which allows for flexibility and stability.
However, Tether also has risks. The main one is a possible decrease in interest rates in the US, which will reduce income from treasuries. Also, increased regulation of stablecoins, especially in Europe and the US, may limit the company's capabilities. A number of large exchanges have already limited functionality with USDT, and new requirements for reserve audits are expected in the US.
Fluctuations in gold and bitcoin prices can also affect financial performance: for example, in the first quarter of 2025, Tether's profit fell by 83% compared to the end of 2024 precisely because of such factors.
In summary, Tether's revenue is primarily driven by smart use of high Treasury rates and strategic asset diversification. However, future earnings growth may slow due to lower rates and tighter regulation.
