Exchange : Tether outperforms BlackRock in 2023 with record profits

In 2023, Tether, issuer of the USDT stablecoin, surpassed the world’s largest asset manager, BlackRock, in terms of profits. What seemed improbable a few years ago is now a reality that prompts reflection. Indeed, this contrast between traditional finance and crypto illustrates a paradigm shift in how investors perceive stability and profitability. While USDT dominates the stablecoin market, Tether has capitalized on this dynamic to record a historic performance.

Tether surpasses BlackRock : the numbers that speak

In 2023, Tether generated a profit of $6.2 billion, surpassing the $5.5 billion earned by BlackRock, a $10 trillion asset manager. That’s a gap of $700 million in favor of the stablecoin issuer. This difference is partly explained by the significant growth of USDT, which now represents 75 % market share with a capitalization of $119 billion. Indeed, Tether has focused its investments on assets such as U.S. Treasury bills, Bitcoin, and gold, allowing it to generate high returns in an unstable economic environment. This efficient asset management, combined with a lean structure of fewer than 100 employees, led to unprecedented profits per employee.

Tether’s rise is closely tied to the growth of the stablecoin market, perceived as a more stable solution in the face of traditional crypto volatility. As the main issuer of stablecoins, Tether has capitalized on this trend, as stablecoins are now considered one of the main drivers of the transition toward more decentralized finance. Additionally, stablecoin issuers, with Tether being the largest, are now among the top 20 holders of U.S. Treasury bills, a strategic position that gives them increasing influence over traditional financial markets, including the stock market.

An effective economic model and ambitious prospects

Unlike BlackRock, which manages massive and diversified assets in publicly traded companies, Tether has adopted a more focused and agile approach. The company has invested in highly liquid assets, including short-term U.S. Treasury bills, while keeping operational costs low due to a small and highly efficient team. This strategy, coupled with growing demand for USDT in crypto exchanges, has allowed Tether to maintain an exceptional level of profitability. According to its CEO, Paolo ARDOINO, “the small size of our structure allows us to be extremely profitable per employee,” a key factor contributing to their success in 2023.

BlackRock’s strategy, while different, is still impacted by the rise of decentralized finance. With the increasing prominence of stablecoins, traditional asset managers face unexpected competition, which could force changes in how they allocate resources in the future. The prospects for Tether are also promising. The stablecoin market continues to grow, and the company appears poised to strengthen its influence, particularly in global regulatory discussions on cryptos.

The record profits of Tether in 2023 illustrate the rapid evolution of the global financial landscape. While traditional finance, embodied by giants like BlackRock continues to dominate the stock market, cryptos and stablecoins are starting to play an increasingly central role. Tether’s results show that agility and adaptability can surpass the size and complexity of the market’s biggest players.