Tether's Reserve Report Reveals Hidden $4.2B Hit Amid Reported Profit

Tether's second-quarter results show an operating profit of $1.5 billion, but its reserve report reveals a negative financial result of $4.211 billion for the same period.

The company's net capital movement implies a hit that reduced the cushion above liabilities from $8.23 billion to $4.11 billion in three months.

The main culprit behind this compression is the decline in asset values, particularly gold and Bitcoin, which fell by 14% each. This resulted in estimated markdowns of around $2.8 billion for gold and $928 million for Bitcoin, totaling $3.73 billion.

Tether's reserve report values its assets at fair value, meaning price swings can move the numbers significantly. The company's total assets fell from nearly $191.8 billion to $187.7 billion over the same stretch, while liabilities remained relatively stable.