Tether’s Successful 2023 & Bitcoin ETF Filing Withdrawn

In 2023, Tether, the issuer of the stablecoin USDT, saw a successful year, earning $6.2 billion in net profits. Much of these profits came from passive income generated by United States Treasury securities that back Tether’s stablecoin reserves. Tether took advantage of concerns surrounding the U.S. banking system and potential contagion effects on other stablecoins, such as USD Coin (USDC). To address these concerns, Tether increased its exposure to high-level assets, primarily short-term U.S. Treasurys, which are considered one of the safest assets in the world. This move allowed Tether to profit from the higher interest rate environment and improve its risk profile.

The growth of Tether reflects a growing confidence in stablecoins as alternatives to traditional financial services. Stablecoins provide a fast, efficient, and often cheaper method for conducting transactions, especially for cross-border payments. Many cryptocurrency exchanges and lending platforms offer attractive yields ranging from 7% to 20% for stablecoin deposits. Tether’s success and its position as one of the top buyers of U.S. Treasury bills demonstrate the close connection between digital assets and the overall financial system. Stablecoins may play an increasingly important role in the strength of the U.S. dollar in the future.

Tether achieved a record-breaking net profit of $2.85 billion in the fourth quarter of 2023. This profit was driven by interest from U.S. Treasury securities and strong performances from other assets, including gold and Bitcoin reserves. Tether’s total assets under management include $80.3 billion in U.S. Treasurys, $2.8 billion in BTC, $3.5 billion in gold, and $1.5 billion in venture capital investments.

The Cboe BZX Exchange withdrew its application to list shares of the Global X spot Bitcoin ETF. The application was first filed in August 2023 and had been under consideration by the United States Securities and Exchange Commission. Spot Bitcoin ETFs were approved for the first time on January 10. Following its conversion into an ETF, the Grayscale Bitcoin Trust experienced around $5 billion in outflows, while other approved ETFs had a positive net flow of $759 million.

Austrian fintech Bitpanda launched Bitpanda Wealth, an institutional-grade cryptocurrency trading platform. The platform targets high-net-worth individuals, family offices, external asset managers, and corporate treasuries. Bitpanda aims to serve a market that it believes is underserved in Europe. Bitpanda Wealth will provide services for crypto investment, management, reporting, leverage products, exchange-traded funds, commodities, and other assets. Bitpanda is a licensed virtual asset service provider in various European jurisdictions.

Coinbase Global hired former U.K. Chancellor of the Exchequer George Osborne as an adviser. Osborne brings significant experience in government and international affairs, having served as Chancellor from 2010 to 2016. Coinbase has been recruiting former politicians to navigate increasing regulatory pressure. Osborne joins other political figures on Coinbase’s Global Advisory Board, including former U.S. Senator Patrick Toomey, former U.S. Secretary of Defense Mark Esper, and former U.S. Representative Sean Patrick Maloney.