Tether reported $1.5 billion in net operating profit for the second quarter of 2026, but its excess reserve buffer fell 50% over the same period, from $8.23 billion to $4.11 billion. Unrealized losses on the company's gold and bitcoin holdings account for most of the shortfall.
Tether reported $1.5 billion in net operating profit for the second quarter of 2026, according to a BDO attestation released July 31. Yet its excess reserves, the buffer between what the company owns and what it owes to USDT holders, fell from $8.23 billion to $4.11 billion in the same quarter. Given that profit, the buffer should have grown to roughly $9.7 billion; instead, about $5.6 billion left the balance sheet through unrealized losses and capital deployment.
Gold and bitcoin losses drove the drop
Gold accounted for the biggest single hit: Tether increased its holdings from 132.2 to 146.2 metric tons during the quarter, but the metal's price fell roughly 15% to just above $4,000 an ounce, so the position's value slipped from $19.84 billion to $18.84 billion despite the added tonnage. Bitcoin followed a similar pattern: Tether added 1,796 BTC to reach 98,933 coins, yet the bitcoin position's value fell from $6.62 billion to $5.80 billion as the price used in the attestation dropped from $68,200 to $58,600. Combined, gold and bitcoin absorbed about $1.8 billion in unrealized losses, and Tether also cut its secured lending by approximately $2.38 billion, a 15% reduction.
A profit model tied to interest rates
Tether's profit depends largely on interest rate yields from its US Treasury holdings and repo operations, a dependency that cuts both ways. If the Federal Reserve cuts rates by 200 basis points over the next year, Tether's annualized operating profit would fall from about $6 billion to roughly $3 billion, assuming constant USDT supply. According to Tether's CEO Paolo Ardoino: "USDT remained fully backed with our reserves still exceeding liabilities by $4.11 billion".
Audit still pending, supply growth slows
A Big Four audit remains unresolved: Tether engaged KPMG in March 2026 for its first full financial audit, but five months later the process has not been completed and the Q2 attestation was again prepared by BDO. Meanwhile, USDT supply reached $184.6 billion, more than 60% of the global stablecoin market, but net issuance grew by only $446 million during the quarter, the slowest pace in more than two years. The $4.11 billion buffer now represents about 2.2% of USDT's total supply, down from a 4.5% cushion at the end of Q1.
Source: crypto.news
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