The crypto world is in turmoil again! Tether and USDT have repeatedly been rumored to collapse and run away, but the reality is that its net profit in the first quarter of this year reached 4.5 billion dollars. What is going on?

Many people believe that the crypto world is just a large funding scheme, or even a scam. Many see Bitcoin as a tool for the U.S. government to exploit the public, while USDT is labeled as a financial trap by Wall Street, believed to collapse sooner or later. However, a little understanding reveals that Bitcoin is unrelated to the U.S. government, and USDT is not as fragile as some imagine. Today, we will comprehensively analyze whether the USDT issued by Tether really carries the risk of a blow-up.

1. Is the excessive issuance of USDT likely to lead to a collapse? This claim is fundamentally untenable!

USDT is a stablecoin pegged to the U.S. dollar at a 1:1 ratio. According to its operating mechanism, for every 1 dollar deposited, 1 USDT can be issued to maintain price stability. Some people are concerned that excessive issuance of USDT may pose risks, but by checking Tether's quarterly audit report (provided by the third-party auditing firm BDO), it can be seen that the issuance of USDT is not without regulation, and there is no so-called excessive issuance issue.

2. Is the misappropriation of funds to speculate on high-risk assets? This is pure nonsense!

The rumors about Tether misappropriating funds to invest in high-risk contracts or altcoins are completely unfounded. Its official website clearly lists the details of its capital reserves, with most funds being invested in low-risk assets such as U.S. Treasuries, reverse repurchase agreements, and money market funds. This prudent allocation of funds greatly reduces the possibility of a blow-up.

3. Is insufficient profitability likely to trigger a collapse? This is completely wrong!

The profit model of USDT is not only diverse but also very stable:

1. Interest income: The funds deposited by users are mainly used to purchase low-risk assets such as U.S. Treasuries, with an annualized return of approximately 4%-5%.

2. Service fees: Users are required to pay certain fees when using USDT, such as a 0.1% transaction fee for each trade and a service fee of 150 dollars per user.

3. Lending business: Tether generates interest by providing USDT financing to enterprises.

4. Market repurchase profits: When the market experiences panic due to de-pegging, Tether will buy back USDT at a low price and sell it at a normal price once the market stabilizes, earning the price difference.

With these profit-making methods, Tether achieved a net profit of 4.5 billion dollars in the first quarter, so there is no need to worry about the issue of a broken capital chain.

4. Could excessive spending lead to a crisis? This is hard to establish!

Tether's main expenses are concentrated on employee salaries and office space costs, with very little spent on advertising. There are hardly any ads about USDT on platforms like YouTube and Google, which further reduces operating costs. Unlike some exchanges and project parties that are forced to lay off employees or cut salaries due to market fluctuations, Tether continues to maintain a stable profit status. As a giant in the crypto world with banking and central bank functions, its capital chain is extremely solid, and the probability of a blow-up is minimal.

The stability of USDT stands the test of time. Behind the rampant rumors is more misunderstanding and panic about the crypto world. Tether maintains a strong market competitiveness through prudent capital management and diversified profit models. For those who believe the rumors, it is advisable to take a look at the public audit reports and market data; speaking with facts can help avoid being misled.