Tether May Rake in $6B in Profits, Surpassing BlackRock’s $5.5B

The stock market index company Barrons.com has reported that the stablecoin issuer Tether Holdings’ asset-backed crypto USDT might rake in $6 billion in profits in 2023. Reported to potentially surpass the investment fund manager BlackRock’s projected $5.5 billion net income, USDT’s circulating supply soared by 25.7% in 2023, claiming 7% of the entire crypto market capitalization (MCAP).

Barrons.com has attributed USDT’s robust profit potential to it being supported 1-to-1 by U.S. Treasury bills (reserves), having $83 billion in deposits. As per Tether Holdings, its excess reserves peaked at an all-time high of $2.44 billion in Q1 2023, with $1.48 billion in net profit. As per Barrons.com, Tether invests the customer deposits in reserves, such as Treasuries, to earn over 5% interest.

BlackRock, offering investment management and technology services to worldwide institutional and retail clients, reportedly has $9.1 trillion under management. The leading asset manager earned $5.4 billion in revenue in 2022 from its active asset-management business, whereas its ETF business’ revenues stood at $5.5 billion.

Nate Geraci, the co-founder of the Certified ETF Adviser designation providing ETF Institute, took to Twitter to comment on the Barrons.com report:

Castle Island Ventures partner Nic Carter quote-tweeted Nate Geraci pointing out the significance of cryptocurrencies, and asserting, “Tether is the most profitable business per employee on the planet”.

In related Tether news, the USDT stablecoin has garnered support from Bitget, a prominent derivatives exchange, for the deposit and withdrawal of U.S. dollar-pegged Tether tokens on the Kava blockchain. 

Gracy Chen, the Managing Director of Bitget, noted,

We are thrilled to support the integration of USDT on the Kava blockchain, granting our users access to the world’s most trusted stablecoin. Kava’s unique blockchain architecture and its remarkable track record of four years with zero security issues make it an ideal platform to protect the interests of USD₮ users.

Further, Tether Holdings’ competitor Circle Internet Financial’s USDC stablecoin supply has been reported to have plummeted by 36% due to regulatory issues and Silicon Valley Bank (SVB) losses. As per reports, the USDT stablecoin was backed by Chinese securities at a time, wherein Tether Holdings held ICBC and CCB securities.