Tether releases Q1 USDT profit estimate amid growing FUD

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  • Teth­er expects its Q1 earn­ings at rough­ly $700 million.
  • The SEC launch­es an assault on sta­ble­coins and USDT might be caught in the crosshairs.

Teth­er has expressed opti­mism about its prof­its in Q1, espe­cial­ly now that March is approach­ing its con­clu­sion. The demand for USDT surged in dur­ing the quar­ter­ly peri­od for numer­ous rea­sons but the road ahead might have some bumps.

Accord­ing to the lat­est reports, Teth­er expects more than $1 bil­lion in total rev­enue from USDT in Q1. It also antic­i­pates a $700 mil­lion prof­it for the quarter.

The first three months of March have so far been quite event­ful for USDT and the rest of the sta­ble­coin seg­ment fol­low­ing USDC’s depegging.

USDT saw a large influx of vol­umes espe­cial­ly as many peo­ple migrat­ed from USDC. This new vol­ume added to Tether’s trans­ac­tion rev­enue gen­er­at­ed from USDT transactions.

Teth­er also increased USDT sup­ply in Q1 and con­tin­ues to increase it fur­ther, accord­ing to recent data. There was rough­ly $77.6.14 bil­lion worth of the sta­ble­coin in cir­cu­la­tion on Thurs­day accord­ing to the lat­est Glassnode data.

USDT circulating supply

Source: Glassnode

But can this surge in cir­cu­lat­ing sup­ply match the pre­vail­ing sta­ble­coin demand? A com­par­i­son between active address­es and trans­fer vol­umes may pro­vide some inter­est­ing insights.

Active address­es peaked in mid-Feb­ru­ary, dur­ing which there was a surge in dai­ly trans­fer vol­ume. This is like­ly because of the out­flows as the mar­ket saw ample demand.

USDT transfer volume and active addresses

Source: Glassnode

Inter­est­ing­ly, the USDT trans­fer vol­ume had its high­est peak on 11 March. This was main­ly because of the afore­men­tioned inflows due to USDC migration.

How­ev­er, trans­fer vol­ume dropped since then due to out­flows as demand for cryp­tocur­ren­cies surged.

U.S. regulator finds inroad to criticize stablecoins

USDT’s grow­ing cir­cu­la­tion might be in prepa­ra­tion for more demand but it has not been with­out concerns.

Many cryp­to pro­po­nents have expressed con­cerns regard­ing Tether’s abil­i­ty to pro­vide a prop­er guar­an­tee of reserves. The SEC recent­ly took advan­tage of those con­cerns to launch crit­i­cism against Teth­er and USDT.

In fact, the SEC described proof of reserves as mean­ing­less in a recent state­ment to investors. The lat­ter con­sti­tutes the lat­est of the market’s concerns.

Reg­u­la­tors have been increas­ing­ly push­ing back against cryp­tocur­ren­cies and sta­ble­coins. How­ev­er, some view this as a good sign that reg­u­la­tors are con­cerned about the cryp­to mar­ket appear­ing as a threat to the tra­di­tion­al finance system.

Regard­less of the cur­rent mar­ket views, there are still con­cerns about poten­tial bank runs that may trig­ger the loss of sta­ble­coin pegs in the future.



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