Tether reported that its excess reserves fell to $4.1 billion at the end of the second quarter, down from $8.2 billion three months earlier, as declines in Bitcoin and gold values weighed on the stablecoin issuer’s broader financial position.
The reduction leaves Tether with a substantially narrower asset cushion above its liabilities, even as the circulation of its USDT stablecoin continued to grow. According to the company’s latest quarterly attestation, Tether held $187.75 billion in total assets against $183.64 billion in total liabilities as of the end of June.
Tether said the figures were reviewed by an independent accounting firm. The company maintained that every USDT token in circulation remained fully backed by its reserves.
The report also showed a negative $3.2 billion financial result for the first half of 2026. Since Tether had previously reported about $1 billion in net profit during the first quarter, the first-half figure implies that the company recorded a loss exceeding $4 billion during the second quarter.
Tether’s second-quarter net operating profit was $1.5 billion, compared with $4.9 billion in net profit during the same period of 2025. Operating profit generally excludes unrealized changes in the market value of assets such as Bitcoin and gold, offering a narrower view of income from the company’s core reserve-management activities.
Bitcoin and gold holdings declined in value
Tether’s holdings of Bitcoin were valued at $5.8 billion at the end of the second quarter, down from $6.6 billion at the end of March. Its precious-metals holdings, primarily physical gold, fell to $18.8 billion from $19.8 billion over the same period.
The decline in the reported value of Tether’s gold position came despite the company adding 14 metric tons of gold during the quarter. That suggests the effect of weaker market prices outweighed the additional metal purchased for the reserve portfolio.
Bitcoin and gold each declined by more than 10% during the second quarter, based on the figures described in Tether’s report. Those moves would reduce the marked value of assets held on the company’s balance sheet, though Tether did not provide a detailed breakdown assigning the full negative financial result to specific holdings or transactions.
The distinction between operating profit and the overall financial result is particularly relevant for Tether because the company holds assets beyond short-term government securities and cash-like instruments. Income from U.S. Treasury bills can remain positive while market losses on Bitcoin, gold, or other positions reduce the total value of assets above liabilities.
Tether did not say that its USDT reserves had fallen below the amount required to redeem tokens at one dollar each. Its reported $4.1 billion in excess assets means it continued to claim a positive reserve buffer at quarter-end, though that margin was half the level reported in the prior quarter.
Treasury income did not offset portfolio moves
Tether has historically relied heavily on interest income from U.S. government debt and similar short-duration instruments. Higher policy rates over recent years made those assets a major source of earnings for stablecoin issuers holding large cash-equivalent reserve pools.
The second-quarter figures show the limits of that income stream when a reserve portfolio also contains sizable allocations to assets with market-price volatility. A $4.1 billion reduction in excess reserves over one quarter places greater attention on the composition of Tether’s non-Treasury holdings and on how quickly they could be converted into cash during a period of elevated redemption demand.
The company also reported that its secured-lending exposure decreased by $2.4 billion during the quarter. Secured lending has drawn scrutiny in past Tether disclosures because loans are less immediately liquid than Treasury bills, cash, or overnight repurchase agreements, even when backed by collateral.
A reduction in that exposure could improve the liquidity profile of the reserves, depending on the terms and collateral behind the loans that remain outstanding. Tether’s report did not provide enough detail to assess how the reduction affected the timing or quality of its liquid assets.
USDT supply continued to expand
Despite the weaker financial result, USDT circulation reached $184.6 billion during the reporting period, after increasing by $446 million. Tether said USDT held more than 60% of the stablecoin market and that its user base had grown by more than 30 million globally.
The continued expansion of USDT means Tether’s reserve management has a direct role in an increasingly large part of cryptocurrency trading and settlement activity. USDT is widely used as a dollar-denominated trading asset, collateral instrument, and transfer currency across blockchain networks.
A smaller excess-reserve buffer does not by itself indicate that USDT is undercollateralized. Stablecoin users can redeem tokens as long as the issuer has sufficient assets and liquidity to meet those requests at par. Yet the quarter illustrates how rapidly the cushion above liabilities can change when a stablecoin issuer carries market-sensitive assets on its balance sheet.
A narrower buffer raises focus on liquidity
Tether Chief Executive Officer Paolo Ardoino said the issued tokens remained fully backed. The company’s attestation supports that claim on the quarter-end snapshot, reporting assets exceeding liabilities by $4.1 billion.
The sharper question for USDT users is how the reserve buffer behaves if market losses coincide with large-scale redemptions. Bitcoin and physical gold can be valuable assets, but their market prices can move quickly, while gold may take longer to mobilize than cash or short-dated government securities.
Tether’s second-quarter results therefore place renewed focus on daily redemption capacity, the liquidity of reserve assets, and the scale of any future exposure to volatile holdings. With USDT supply near $185 billion, changes of several billion dollars in the value of reserve assets now have a more immediate bearing on the issuer’s reported financial cushion.
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