Cash doesn't earn interest. T-bills and money market funds earn minimal interest compared to equities. Given the size of their holdings, Tether is paying a huge opportunity cost for their position. I don't consider that good business.
How greedy do you have to be to look at that and say "yeah, well they could be getting bigger returns with an actively managed portfolio?"
I'm pretty sure Tether was holding less cash than they said multiple times, and at multiple points it was just a house of cards where they were inflating the price of BTC on their own, but I'm also guessing by now they've had made enough to cover.
> How greedy do you have to be to look at that and say "yeah, well they could be getting bigger returns with an actively managed portfolio?"
This is banking and finance. Greed only stops when you run into legislative limits, and sometimes, not even there.
Isnt the whole idea this is a stable coin?
Luckily for the crypto people, Tether makes it near impossible to turn their fantasy money into real money
Based on the Q2 2025 attestation [1] it looks like they have about 162B in assets and 157B in liabilities which leaves ~5B in shareholder equity. Even if they hold most of those assets in treasuries, they probably have an egregiously high return on shareholder equity.
(Fun fact: I think this puts their leverage ratio as high as banks during the 2008 GFC. But treasuries should theoretically be safer than subprime mortgage loans).
Equities would give a higher return on average, they don't really work when the liabilities can get called at any time. Tether has to be able to produce money for people exchanging their tether.
If you were in their position and I gave you 150 billion dollars on the condition that I can withdraw that 150 billion dollars at any time. You'd probably also park it in a short-term money market fund. If you put it in equities and it dropped 1%, you'd be on the hook for 1.5 billion.
[1] https://tether.io/news/tether-issues-20b-in-usdt-ytd-becomes...
A huge understatement, don't you think? ;)
US debt is about as stable as the dollar itself, so to their crypto customers buying bonds is a no-op. Any yield is pure profit for Tether itself.
They may have somewhat sketchily put money into bitcoin at times though.
If you doubt their attestation, it is more reasonable to doubt their claimed total assets before worrying about the breakdown of their investments.