Inside Tether’s Strategy: $6.2 Billion in Annual Profits

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Critics often claim that blockchain technology hasn’t produced real products and is only used for speculative trading. In response to the critics, Trader and entrepreneur Anthony Pompliano dismissed the idea, highlighting Bitcoin as an $850 billion asset, with $600 billion held by long-term holders, proving that people believe in digital assets more than Gold or other financial products. Pointing specifically to stablecoin Tether, he said it has emerged as a significant blockchain application and a ruling example that stablecoins are real. 

Tether Slays Blockchain Skeptics with Billion-Dollar Win

He explained the statistics in his X post, Tether, with almost $100 billion in various fiat currencies tokenized on different blockchains, has become the 16th largest holder of US Treasury bonds. Despite facing criticism and attacks in the current unregulated framework, he believed that this success places Tether as a crucial part of the US financial economy.

The CEO Paolo Ardoino recently revealed an impressive Q4 report, indicating a $2.85 billion profit, with a substantial portion of net operational profit and gold/bitcoin holdings. The total profit for 2023 was $6.2 billion, showcasing Tether’s remarkable journey.

In just 90 days, Tether outpaces traditional financial giants, with a whopping $11.4 billion annual run rate and exceeding the profits of Goldman Sachs last quarter, according to Matt Hogan, Bitwise CIO. 

Messari CEO Ryan Selkis said “Tether is now 10% of JP Morgan’s net profit, but with way fewer employees”. 

Moreover, Pompliano said, Tether’s approach involves holding reserves in various investments, ensuring availability and protection. The company’s excess equity, standing at $5.4 billion, surpasses remaining secured loans. Notably, Tether’s profit per employee exceeds $100 million, making it one of the most lucrative businesses globally.

Hence, this success straightaway challenges the critics of blockchain who think it can’t deal with real-world problems. Stablecoins like Tether and USDC are gaining popularity worldwide for quick and inexpensive value transfers. Tether’s continuous growth contradicts skeptics, emphasizing the impactful role of blockchain technology in the financial sector.