Earnings

Tether, the issuer of the world’s largest stablecoin USDT, reported $1.5 billion in net operating profit for the second quarter of 2026, as returns from its U.S. Treasury portfolio continued to power earnings despite declines in the value of its Bitcoin and gold holdings.

According to the company’s latest quarterly attestation, verified by BDO, Tether held $187.75 billion in total assets against $183.64 billion in liabilities as of June 30, leaving $4.11 billion in excess reserves backing USDT. However, that reserve cushion fell sharply from more than $8.23 billion reported three months earlier, marking a decline of over $4 billion.

Tether earns $1.5B in Q2 2026

Treasury Income Remains Key Profit Driver

Tether said its earnings were primarily generated from income on U.S. Treasury bills and repurchase agreements (repos), which remain the foundation of its reserve strategy. The company has become one of the world’s largest holders of U.S. government debt among private firms, benefiting from elevated short-term interest rates that continue to generate strong recurring income.

Chief Executive Officer Paolo Ardoino said the second quarter tested Tether’s reserve strategy under difficult market conditions.

He acknowledged that some reserve assets were negatively affected during the quarter but stressed that USDT remained fully backed with more than $4 billion in excess reserves. Ardoino also highlighted Tether’s continued purchases of U.S. Treasuries, a reduction in secured lending exposure to $2.38 billion, and an increase in the company’s gold holdings.

New Profit Metric Sparks Discussion

One notable change in the Q2 report was Tether’s decision to report “net operating profit” instead of the “net profit” figure used in previous quarters.

The distinction is significant because operating profit excludes unrealized gains and losses from assets owned by the company, including Bitcoin and gold. Both assets lost value during the second quarter, meaning the reported operating profit does not capture the impact of those market declines.

The shift has drawn attention from industry observers, with some arguing it provides a clearer picture of Tether’s core business performance, while others believe it makes comparisons with previous quarterly reports less straightforward.

Gold and Bitcoin Holdings Grow

Tether continued expanding its reserve assets during the quarter despite falling market prices.

The company increased its physical gold holdings by approximately 14 metric tons, bringing total reserves to around 146.2 metric tons, up from 132.2 metric tons in the previous quarter. However, the value of those holdings declined to $18.84 billion from $19.84 billion as gold prices fell roughly 15% during the reporting period.

Tether also added approximately 1,796 BTC, increasing its Bitcoin holdings to 98,933 BTC. Even so, the reported value of its Bitcoin reserves fell to $5.80 billion, down from $6.62 billion, because the valuation price used in the report dropped to about $58,600 per BTC from $68,200 in Q1.

The lower valuations reflected market prices rather than asset sales, with Tether continuing to accumulate both assets during the quarter.

Tether’s Q2 2026 (left) and Q1 2026 (right) reserve asset reports.

USDT Supply Continues to Expand

Despite softer conditions across the broader crypto market, demand for USDT remained resilient.

Tether reported that the circulating supply of USDT increased by approximately $446 million during the quarter to $184.6 billion, allowing the company to maintain its position as the world’s largest stablecoin issuer with more than 60% of the global stablecoin market.

The steady growth highlights continued demand for dollar-backed digital assets across cryptocurrency trading, payments, and decentralized finance.

Reserve Buffer Shrinks

While Tether remained highly profitable, the most closely watched figure in the report was the sharp decline in excess reserves.

The company’s reserve surplus fell from more than $8.2 billion at the end of the first quarter to $4.1 billion by June 30. Tether did not explain the reason for the reduction, prompting questions about how capital was deployed during the quarter.

Tether’s Q2 2026 (left) and Q1 2026 (right) financial reports.

The lower reserve cushion also coincided with declines in the value of Bitcoin and gold, both of which fell by more than 10% during the period. Because Tether reported operating profit rather than net profit, those unrealized losses were excluded from its headline earnings.

Even so, the company emphasized that its assets continue to exceed liabilities by billions of dollars, ensuring that every USDT in circulation remains fully backed.

The latest results reinforce the strength of Tether’s Treasury-focused business model, which continues to generate significant income even during periods of crypto market weakness. At the same time, the shrinking reserve surplus and the company’s shift in reporting methodology are likely to remain key areas of scrutiny as investors and regulators continue to monitor the financial health of the world’s largest stablecoin issuer.