Tether increased its exposure to US Treasuries by more than $3 billion between quarters while posting a steep year-over-year decline in quarterly profits.
According to its latest attestation report published on April 30, Tether’s combined holdings of US Treasury bills, reverse repurchase agreements, and money market funds with Treasury exposure reached approximately $120 billion by March 31, up from around $116.7 billion at the end of 2024.
The bulk of these holdings includes $98.5 billion in direct Treasury bills, $15.1 billion in overnight reverse repurchase agreements, and $6.3 billion in money market funds, of which $4.9 billion are indirect allocations to Treasuries.
The sharp increase comes as the company shifts further toward low-risk, short-term government instruments to back its USDT stablecoin reserves.
Tether’s updated reserve composition shows that it holds 81.5% of its total $149.3 billion in cash, cash equivalents, and short-term deposits, primarily US government debt.
Tether CEO Paolo Ardoino stated:
“Q1 2025 showcases Tether’s continued leadership in stability, strength, and vision. With record US Treasury exposure, growing reserves, strong profits, and increased adoption of USD₮ worldwide, we remain focused on delivering trust, transparency, and value to hundreds of millions of users.”
He added that Tether’s mission is to “responsibly and compliantly” boost the digital economy and strengthen the US dollar’s role on the global stage.
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.
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