Tether’s Soaring Profits Expected to Surpass BlackRock, Making It One Of America’s Most Profitable Company in 2023, Analysts Predict
In a surprising turn of events, Tether, the stablecoin issuer, is poised to become one of America’s most profitable companies this year. Industry analysts anticipate that its earnings could surpass those of asset management giant BlackRock, thanks to its unique backing by high-earning U.S. treasuries.
A recent report by Barron’s shed light on Tether’s remarkable rise and dominance within the stablecoin market. By acting as a bank and investing users’ deposits in reserves, such as Treasuries with a 5% return, Tether has been able to outperform its crypto competitors.
Prominent figures in the industry, including Nic Carter from Castle Island Ventures and ETF expert Nate Geraci, have weighed in on Tether’s success. While emphasizing the significant impact the company has made, Carter proclaimed,
“Tether is the most profitable business per employee on the planet.” He further added, “Don’t tell me crypto is good for nothing!”
Tether Emerges as Financial Giant, Outshining BlackRock and Coinbase
Tether’s financial prowess is evident as it achieved an all-time high of $2.44 billion in excess reserve surplus during the first quarter, resulting in a net profit of $1.48 billion. With projections of approximately $6 billion in profits for this year, Tether is now considered a financial giant in the market. This estimation even surpasses BlackRock’s forecasted net income of $5.5 billion, solidifying Tether’s position as a major contender.
Notably, Tether’s profitability is expected to outshine that of popular cryptocurrency exchange Coinbase, which is projected to record a loss of $564 million in 2023. As demand for Tether’s stablecoins continues to surge, the circulating supply has grown by 25.7% since the beginning of the year, reaching an impressive peak of $83 billion. This accounts for a significant 64% market share and approximately 7% of the total cryptocurrency market capitalization.
Stablecoin Showdown: Tether Thrives, Circle Struggles, and Binance USD Bows Out
In contrast, Tether’s rival firm, Circle, faces challenges due to greater exposure to U.S. regulators and institutions. Coupled with losses resulting from Silicon Valley Bank exposure, Circle’s USDC stablecoin supply has witnessed a substantial decline this year. Since the start of 2023, the USDC supply has contracted by 36%, representing a reduction of $16 billion. Currently, the circulating supply rests at around $28.5 billion, reflecting a market share of 22% and returning to levels last seen in September 2021.
The stablecoin ecosystem has also faced regulatory crackdowns, leading to the removal of the third-largest stablecoin, Binance USD, from the market. This development has left only one major player, raising concerns about decentralization, diversity, and investor protection within the stablecoin landscape.
As Tether continues to demonstrate unprecedented profitability, it remains to be seen how the stablecoin industry will evolve and adapt in the face of regulatory challenges and the increasing concentration of power in the market.
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