- Tether witnessed a successful second quarter in terms of revenue despite market volatility.
- BTC could benefit from Tether’s investment behavior.
Despite the turbulence the DeFi sector has been through, Tether [USDT] and its associated stablecoins have continued to grow on several fronts. Because of this, Tether managed to be profitable in terms of revenue in the past quarter.
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Tether sees green
Tether has shown impressive strength, with net worth exceeding liabilities by $855 million and operating profits of more than $1 billion for Q2 2023. The foundation of the operating framework revolved around USDT’s USD support, which continues to be used for short-term investments US Treasury bills or reverse repos, which effectively generate lucrative interest income.
One of the reasons for Tether’s dominance was the strong growth of USDT’s market cap. Due to various reasons, such as the fall of Silicon Valley Bank and the subsequent drop in USDC’s market share, USDT managed to experience tremendous growth. Based on Santiment’s data, USDT was found to significantly outperform USDC and DAI.
Source: Sentiment
In terms of network growth, USDT, along with DAI, saw growth. This indicated that new addresses showed increasing interest in both stablecoins. USDC, on the other hand, was unable to experience the same growth and failed to attract new addresses.
Source: Sentiment
Despite its dominance in this sector, the Tether stablecoin still lagged USDC in terms of volume. According to Dune Analytics, USDC accounted for 47.9% of total stablecoin volume at the time of writing.
However, USDT was only able to capture 37.1% of the total market share in this segment, despite having the highest market cap.
Source: Dune analysis
How can BTC benefit?
Another benefactor of USDT and Tether’s dominance would be Bitcoin. Their financials indicated that the company has been actively accumulating BTC over the past two quarters. If Tether sticks to this strategy and collects more BTC from its earnings, it could provide some measure of support to ailing Bitcoin.
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At the time of writing, BTC was still below the USD 30,000 level and was trading at USD 28,800. The number of holders of BTC continued to rise, but they could not exert much influence on the falling price.
Source: Sentiment