Since Tether released their Q4 profit numbers, I’ve seen a number of really compelling comparisons including one showing that Tether (with ~50 employees) is generating larger profits than Goldman Sachs (with 10,000+ employees).
At a run rate of $11 billion in annual profit, how many companies are actually making more money than Tether? And how many of those companies have 100,000+ employees?
This article from Pomp is a good overview of Tether’s Q4 business results.
1045 sats \ 3 replies \ @grayruby 1 Feb
No, their profit is too exposed to treasury yields. But it is a good business to take dollars convert them into interest bearing treasuries and give back digital dollars in return. Also very smart that they are sweeping profits into bitcoin.
Tether is a welcome buyer of treasuries right now. When they become too large and pose a risk to the system the powers that be may not be so indifferent to them.
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53 sats \ 1 reply \ @kr OP 1 Feb
their profit is too exposed to treasury yields
I agree there is some risk with their profits being so concentrated today, just not sure how to quantify that risk
Tether is a welcome buyer of treasuries right now. When they become too large and pose a risk to the system the powers that be may not be so indifferent to them.
It’s a tricky balance to navigate though, if Tether becomes a really significant buyer of US debt, how do you stop them from buying debt without sending yields through the roof?
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The yield is all they care about, no? And not having a run on the reserves. Their liabilities are denominated in the same USD and USD-like treasuries as their assets, so as long as the redeem demand doesn't outstrip their yield rate and reserves, they're still making rather large profits.
Stablecoins in general are also a large source of demand for the US dollar and its treasures/interest products, so the US gov't has a cynical reason to just allow Tether and participate via USDC/Circle. Even if the competitors to Circle exist, they all still need to buy and hold the US dollar which is a contributor to the whole "Dollar Milkshake" theory from Brent Johnson
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It’s the UST, so probably one of the least risky asset to hold, ever.
A concentration of allocation does not mean riskier. I have seen a lot diversified portfolio ended up with more riskier positions.
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698 sats \ 1 reply \ @hodlpleb 1 Feb
You give me dollars I give you nothing I buy bitcoin
Those are some mind-blowing figures, and I wouldn't argue yet against champ status for Tether.
As for Pompliano's claim, "So much for those critics that continue to claim there are no problems solved with this new technology"--I don't see the gotchya. Aside from supporting stablecoin, he doesn't share what problems are solved.
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That's very impressive, but don't forget that Tether is like a central bank...they can "print" money whenever they want (USDT is their money). Just check "whale alerts" on Twitter, and you can realise that only in January they "minted" more than 1 billion USDT (equally with 1 billion $).
Tether is definitely not a bad business, but I think it is not the best busines in the world
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411 sats \ 0 replies \ @OT 2 Feb
Could be the most profitable in the last few years
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Well yes, they have Donald Trump, the Queen of England (Who is not dead yet) and Jamie Dimon trying to make them win. The wind is definitely at their backs
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