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Tether Earns Billions on US Treasuries, Fuels Stablecoin Disruption
Key Takeaways
- Tether has become a significant player in the US Treasuries market, ranking as the 17th-largest holder with investments amounting to approximately $135 billion.
- Tether’s business model involves earning interest by reinvesting the capital lent by stablecoin holders at zero interest rates in US Treasury bills.
- In the first three quarters of 2025, Tether has reported a net profit exceeding $10 billion, outpacing many banks in the S&P 500.
- The stablecoin market faces potential disruption as Tether leverages its financial strategy to maintain dominance.
WEEX Crypto News, 10 February 2026
The Impact of Tether’s Strategy on the Stablecoin Market
In an evolving financial landscape, the strategies undertaken by stablecoin issuers like Tether are pivotal in shaping the future of digital banking and currency exchange. Recently, Tether’s maneuvers in the US Treasuries market have caught significant attention, not merely because of the scale involved but due to the strategic implications it holds for the broader stablecoin ecosystem.
Tether’s Strategic Position in US Treasuries
Tether has strategically positioned itself as one of the most formidable holders of US sovereign debt, securing the 17th-place spot in terms of magnitude. This trajectory sees Tether managing investments totaling around $135 billion, underscoring how stablecoin entities might redefine conventional financial paradigms. The company utilizes the capital derived from its stablecoin holders, who essentially “lend” their funds without earning interest, to acquire interest-yielding treasury bills. This operation underlines a savvy financial strategy, wherein Tether capitalizes on these investments to generate substantial revenue streams.
Profits Surpassing Traditional Banks
Within the first three quarters of 2025 alone, Tether’s net profits have soared beyond $10 billion, a figure that competes with and even exceeds the earnings of several well-established S&P 500 banks. Such financial success is propelled by Tether’s adept exploitation of treasury rates, turning its operations into a profitable enterprise regardless of the inherent lending costs, or lack thereof, from its stablecoin clientele. This profitability not only fortifies Tether’s market position but also pressures its competitors to adopt similar innovative approaches.
Implications for the Stablecoin Sector
The disruption inherent in Tether’s recent profits poses a question of resilience within the stablecoin market. As Tether capitalizes on its vast reserves, the stablecoin sector might experience induced volatility, prompting shifts and restructuring among peers anxious to maintain pace and profitability. Consequently, this environment may catalyze progressions, encouraging diversity and competition within the sector to offer better rates or innovative value propositions to capture market share.
Additionally, Tether’s model raises discussions about the ethicality and market impact of leveraging funds from zero-interest environments. As the conversation continues, especially with market commentators predicting potential market disruption, stability and trust in digital currencies may hinge on transparent and equitable lending practices.
Regulatory Challenges and Adaptations
The trajectory Tether is on also tangentially engages with the regulatory environment impacting stablecoins. The issuance of a “Made in America” stablecoin aligns with increased compliance requirements born from legislative acts such as the GENIUS Act, which mandates that only those stablecoins satisfying specific qualifications are marketable to U.S. consumers. Tether’s domestic expansion through regulatory alignment is critical in its broader global strategy, ensuring its marketability amid stringent compliance landscapes. This compliance is essential for averting operational restrictions in key markets and solidifying Tether’s competitive standing against rivals like Circle’s USDC, which have gained favor through early compliance.
The Ripple Effect on Crypto Markets
The implications of Tether’s moves extend beyond the confines of the stablecoin niche. They contribute to broader discussions on cryptocurrency stability, market integrity, and the long-term evolution of decentralized finance. As these digital coins grow in acceptance and integration into traditional financial systems, the strategies of entities like Tether in utilizing such vast financial instruments underscore a potential redefinition of global financial operations.
FAQ
What is Tether’s strategy in US Treasuries?
Tether’s strategy involves acquiring US Treasury bills using funds derived from its stablecoin holders at a zero-interest lending rate. This approach allows Tether to earn substantial profits from the interest accrued on these investments.
How does Tether’s profit compare to traditional banks?
In the first three quarters of 2025, Tether reported net profits exceeding $10 billion, surpassing the earnings of many banks listed on the S&P 500. This highlights Tether’s ability to leverage its financial model to outperform more established banking institutions.
What regulatory challenges does Tether face?
Tether faces regulatory challenges, particularly due to the GENIUS Act, which imposes compliance requirements for stablecoins marketed to US consumers. Tether has launched a “Made in America” stablecoin to meet these standards and ensure continued market access.
How might Tether’s strategy disrupt the stablecoin market?
Tether’s financial success underscores the potential for disruption within the stablecoin market. Its ability to generate profits from zero-interest lending practices could force competitors to adopt innovative strategies to remain competitive and profitable.
What are the ethical considerations of Tether’s zero-interest lending?
The ethical considerations revolve around the practice of leveraging funds at a zero-interest rate from stablecoin holders. Transparency in lending practices and the market impact on stablecoin investors is crucial in maintaining trust and stability in the cryptocurrency market.
To further explore the potential financial advantages and opportunities in the rapidly expanding digital currency world, consider signing up with WEEX [here](https://www.weex.com/register?vipCode=vrmi).
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• Financial Performance:
Total revenue for the full year 2025 was $688.1 million, with $179.5 million in the fourth quarter.
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Full-year adjusted EBITDA was $24.5 million, while the fourth quarter was -$156.3 million.
• Mining Operations and Costs:
A total of 6,594.6 bitcoins were mined throughout the year, averaging 18.07 bitcoins per day; of which 1,718.3 bitcoins were mined in the fourth quarter, averaging 18.68 bitcoins per day.
The average mining cost for the full year (excluding miner depreciation) was $79,707 per bitcoin, and for the fourth quarter, it was $84,552;
The all-in sustaining costs were $97,272 and $106,251 per bitcoin, respectively.
As of the end of December 2025, the company has cumulatively produced 7,528.4 bitcoins since entering the bitcoin mining business.
• Strategic Progress:
The company has completed the termination of the American Depositary Receipt (ADR) program and transitioned to a direct listing on the NYSE to enhance information transparency and align with its strategic direction, with a long-term goal of expanding its investor base.
CEO Paul Yu stated: "2025 marked the company's first full year as a bitcoin mining enterprise, characterized by rapid execution and structural reshaping. We completed a comprehensive adjustment of our asset system and established a globally distributed mining network. Additionally, the company introduced a new management team, further strengthening our capabilities and competitive advantage in the digital asset and energy infrastructure space. The completion of the NYSE direct listing and USD pricing also signifies our transformation into a global AI infrastructure company."
"As we enter 2026, the company will continue to optimize its balance sheet structure and enhance operational efficiency and cost resilience through adjustments to the miner portfolio. At the same time, we are advancing our strategic transformation into an AI infrastructure provider. Leveraging EcoHash, we will utilize our capabilities in scalable computing power and energy networks to provide cost-effective AI inference solutions. The relevant site transformations and product development are progressing simultaneously, and the company is well-positioned to sustain its execution in the new phase."
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The total revenue for the fourth quarter was $1.795 billion. Of this, the Bitcoin mining business contributed $1.724 billion in revenue, generating 1,718.3 Bitcoins during the quarter. Revenue from the international automobile trading business was $4.8 million.
The total operating costs and expenses for the fourth quarter amounted to $4.56 billion, primarily attributed to expenses related to the Bitcoin mining business, as well as impairment of mining machines and fair value losses on Bitcoin collateral receivables.
This includes:
· Cost of Revenue (excluding depreciation): $1.553 billion
· Cost of Revenue (depreciation): $38.1 million
· Operating Expenses: $9.9 million (including related-party expenses of $1.1 million)
· Mining Machine Impairment Loss: $81.4 million
· Fair Value Loss on Bitcoin Collateral Receivables: $171.4 million
The operating loss for the fourth quarter was $276.6 million, a significant increase from a loss of $0.7 million in the same period of 2024, primarily due to the downward trend in Bitcoin prices.
The net loss from ongoing operations was $285 million, compared to a net profit of $2.4 million in the same period last year.
The adjusted EBITDA was -$156.3 million, compared to $2.4 million in the same period last year.
The total revenue for the full year was $6.881 billion. Of this, the revenue from the Bitcoin mining business was $6.755 billion, with a total output of 6,594.6 Bitcoins for the year. Revenue from the international automobile trading business was $9.8 million.
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· Revenue Cost (excluding depreciation): $543.3 million
· Revenue Cost (depreciation): $116.6 million
· Operating Expenses: $28.9 million (including related-party expenses of $1.1 million)
· Miner Impairment Loss: $338.3 million
· Bitcoin Collateral Receivable Fair Value Change Loss: $96.5 million
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The 2025 non-GAAP adjusted net profit is $24.5 million (compared to $5.7 million in 2024). This measure does not include share-based compensation expenses; refer to "Use of Non-GAAP Financial Measures" for details.
As of December 31, 2025, the company's key assets and liabilities are as follows:
· Cash and Cash Equivalents: $41.2 million
· Bitcoin Collateral Receivable (Non-current, related party): $663.0 million
· Miner Net Value: $248.7 million
· Long-Term Debt (related party): $557.6 million
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As per the stock repurchase plan disclosed on March 13, 2025, as of December 31, 2025, the company had repurchased a total of 890,155 shares of Class A common stock for approximately $1.2 million.
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• Financial Performance:
Total revenue for the full year 2025 was $688.1 million, with $179.5 million in the fourth quarter.
Bitcoin mining business revenue for the full year was $675.5 million, with $172.4 million in the fourth quarter.
Full-year adjusted EBITDA was $24.5 million, while the fourth quarter was -$156.3 million.
• Mining Operations and Costs:
A total of 6,594.6 bitcoins were mined throughout the year, averaging 18.07 bitcoins per day; of which 1,718.3 bitcoins were mined in the fourth quarter, averaging 18.68 bitcoins per day.
The average mining cost for the full year (excluding miner depreciation) was $79,707 per bitcoin, and for the fourth quarter, it was $84,552;
The all-in sustaining costs were $97,272 and $106,251 per bitcoin, respectively.
As of the end of December 2025, the company has cumulatively produced 7,528.4 bitcoins since entering the bitcoin mining business.
• Strategic Progress:
The company has completed the termination of the American Depositary Receipt (ADR) program and transitioned to a direct listing on the NYSE to enhance information transparency and align with its strategic direction, with a long-term goal of expanding its investor base.
CEO Paul Yu stated: "2025 marked the company's first full year as a bitcoin mining enterprise, characterized by rapid execution and structural reshaping. We completed a comprehensive adjustment of our asset system and established a globally distributed mining network. Additionally, the company introduced a new management team, further strengthening our capabilities and competitive advantage in the digital asset and energy infrastructure space. The completion of the NYSE direct listing and USD pricing also signifies our transformation into a global AI infrastructure company."
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The company's Chief Financial Officer, Michael Zhang, stated: "By 2025, the company is expected to achieve significant revenue growth through its scaled mining operations. Despite recording a net loss of $452.8 million from ongoing operations, mainly due to one-time transformation costs and market-driven fair value adjustments, the company, from a financial perspective, will reduce its leverage, optimize its Bitcoin reserve strategy and liquidity management, introduce new capital to strengthen its financial position, and seize investment opportunities in high-potential areas such as AI infrastructure while navigating market volatility."
The total revenue for the fourth quarter was $1.795 billion. Of this, the Bitcoin mining business contributed $1.724 billion in revenue, generating 1,718.3 Bitcoins during the quarter. Revenue from the international automobile trading business was $4.8 million.
The total operating costs and expenses for the fourth quarter amounted to $4.56 billion, primarily attributed to expenses related to the Bitcoin mining business, as well as impairment of mining machines and fair value losses on Bitcoin collateral receivables.
This includes:
· Cost of Revenue (excluding depreciation): $1.553 billion
· Cost of Revenue (depreciation): $38.1 million
· Operating Expenses: $9.9 million (including related-party expenses of $1.1 million)
· Mining Machine Impairment Loss: $81.4 million
· Fair Value Loss on Bitcoin Collateral Receivables: $171.4 million
The operating loss for the fourth quarter was $276.6 million, a significant increase from a loss of $0.7 million in the same period of 2024, primarily due to the downward trend in Bitcoin prices.
The net loss from ongoing operations was $285 million, compared to a net profit of $2.4 million in the same period last year.
The adjusted EBITDA was -$156.3 million, compared to $2.4 million in the same period last year.
The total revenue for the full year was $6.881 billion. Of this, the revenue from the Bitcoin mining business was $6.755 billion, with a total output of 6,594.6 Bitcoins for the year. Revenue from the international automobile trading business was $9.8 million.
The total annual operating costs and expenses amount to $1.1 billion.
Specifically, they include:
· Revenue Cost (excluding depreciation): $543.3 million
· Revenue Cost (depreciation): $116.6 million
· Operating Expenses: $28.9 million (including related-party expenses of $1.1 million)
· Miner Impairment Loss: $338.3 million
· Bitcoin Collateral Receivable Fair Value Change Loss: $96.5 million
The full-year operating loss is $437.1 million. The continuing operations net loss is $452.8 million, while in 2024, there was a net profit of $4.8 million.
The 2025 non-GAAP adjusted net profit is $24.5 million (compared to $5.7 million in 2024). This measure does not include share-based compensation expenses; refer to "Use of Non-GAAP Financial Measures" for details.
As of December 31, 2025, the company's key assets and liabilities are as follows:
· Cash and Cash Equivalents: $41.2 million
· Bitcoin Collateral Receivable (Non-current, related party): $663.0 million
· Miner Net Value: $248.7 million
· Long-Term Debt (related party): $557.6 million
In February 2026, the company sold 4,451 bitcoins and repaid a portion of related-party long-term debt to reduce financial leverage and optimize the asset-liability structure.
As per the stock repurchase plan disclosed on March 13, 2025, as of December 31, 2025, the company had repurchased a total of 890,155 shares of Class A common stock for approximately $1.2 million.
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