Analyzing Tether’s Approach: Generating $6.2 Billion in Yearly Profits
Blockchain technology has long faced criticism from skeptics who claim that it lacks real-world applications and is only used for speculative trading. However, Trader and entrepreneur Anthony Pompliano has dismissed this notion, pointing to the success of Bitcoin and stablecoin Tether as evidence of the belief in digital assets.
Pompliano highlights the fact that Bitcoin is now valued at $850 billion, with $600 billion held by long-term holders. This demonstrates that people have more faith in digital assets than traditional financial products like gold. He specifically mentions Tether as a significant blockchain application, citing its emergence as a dominant stablecoin.
In a recent X post, Pompliano explains that Tether has tokenized nearly $100 billion in various fiat currencies on different blockchains. This has made Tether the 16th largest holder of US Treasury bonds, solidifying its position in the US financial economy. Despite facing criticism and attacks within the unregulated framework, Tether’s success speaks volumes.
Tether’s CEO, Paolo Ardoino, recently released a Q4 report that showcased impressive numbers. The company reported a profit of $2.85 billion, with a substantial portion coming from net operational profit and holdings in gold and bitcoin. Overall, Tether’s profit for 2023 reached $6.2 billion, highlighting its remarkable journey.
What’s even more impressive is that Tether outperformed traditional financial giants in just 90 days, with an annual run rate of $11.4 billion. According to Matt Hogan, Bitwise CIO, Tether’s profits even exceeded those of Goldman Sachs in the last quarter.
Ryan Selkis, CEO of Messari, noted that Tether now accounts for 10% of JP Morgan’s net profit, despite having significantly fewer employees.
Pompliano further emphasizes Tether’s approach of holding reserves in various investments to ensure availability and protection. The company’s excess equity of $5.4 billion surpasses its remaining secured loans. Notably, Tether’s profit per employee exceeds $100 million, making it one of the most lucrative businesses globally.
This success directly challenges the critics who believe that blockchain technology is incapable of solving real-world problems. Stablecoins like Tether and USDC are gaining popularity worldwide for their quick and inexpensive value transfers. Tether’s continuous growth contradicts skeptics, highlighting the impactful role of blockchain technology in the financial sector.