Tether reported Friday that its excess reserves fell by $4.1 billion from the previous quarter amid a sharp year-on-year deterioration in its financial results.
At the end of the first quarter, the stablecoin issuer of USDT said the value of its assets exceeded its liabilities by $8.2 billion. On Friday, that figure had fallen to $4.1 billion.
Tether's most recent financial report also showed a negative $3.2 billion financial result for the first half of the year. That implies the company posted a loss of more than $4 billion, given that in the first quarter it reported $1 billion in net profit.
The company, which is perhaps the most profitable company in crypto, didn't immediately respond to a request for clarification.
The company highlighted it had generated a net operating profit of $1.5 billion during the fiscal period.
"Tether had a great second quarter of 2026 ... despite highly volatile global markets," CEO Paolo Ardoino said on social media. "USDT user base continued to grow, reaching the new all-time-high of [more than 650 million]."
In its Q2 release, Tether emphasized “net operating profit” rather than net profit. Net operating profit generally excludes unrealized gains or losses caused by changes in the value of assets such as bitcoin and gold. Last year, Tether reported $4.9 billion in net profit.
Like leading BTC treasury Strategy, Tether marks its bitcoin holdings to market, meaning price declines reduce their reported value.
The value of Tether’s bitcoin and precious-metals holdings fell during the quarter. Its bitcoin position declined to $5.8 billion from $6.6 billion in the previous quarter. Its precious-metals position, consisting of physical gold, fell to $18.8 billion from $19.8 billion, even though Tether added 14 tons of gold.
Tether did not disclose what drove the remainder of its negative financial result. Bitcoin and gold both shed more than 10% of their price during the second quarter.
The company also reported that its secured-lending exposure declined by $2.4 billion.
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