In 2023, Tether, issuer of the USDT stablecoin, surpassed the world’s largest asset manager, BlackRock, in terms of profits. What seemed unlikely a few years ago is now a startling reality. 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 been able to take advantage of this momentum to record a historic performance.
Tether overtakes BlackRock: The numbers that speak for themselves
In 2023, Tether generated a profit of $6.2 billion, which allows it to surpass the $5.5 billion made by BlackRock, a $10 trillion asset manager. This is a gap of $700 million in favor of the stablecoin issuer. Such a difference is partly explained by the significant growth of USDT, which today represents 75% of the market share with a capitalization of $119 billion. Indeed, Tether has focused its investments on assets such as US Treasuries, Bitcoin, and gold, which has allowed it to generate high returns in an unstable economic environment. This efficient asset management, combined with a lean structure of less than 100 employees, drove to unprecedented profits per employee.
Tether’s rise is closely tied to the growth of the stablecoin market, which is seen as a more stable alternative to the volatility of traditional cryptocurrencies. As the leading issuer of stablecoins, Tether has been able to capitalize on this trend, as stablecoins are now seen as one of the main drivers of the shift toward more decentralized finance. Additionally, stablecoin issuers, of which Tether is the largest, are now among the top 20 holders of U.S. Treasuries, a strategic position that gives them increasing influence over traditional financial markets, including the stock market.
An efficient 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 US Treasuries, while limiting its operational costs thanks to a small and high-performing 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 that contributed to their success in 2023.
BlackRock’s strategy, while different, is nonetheless impacted by the rise of decentralized finance. With the rise of stablecoins, traditional asset managers are facing unexpected competition, and this could force changes in how they allocate their resources in the future. The outlook for Tether is also promising. The stablecoin market continues to grow. As such, the firm appears poised to increase its influence, particularly in global regulatory discussions about crypto.
Tether’s record earnings in 2023 illustrate the rapidly changing global financial landscape. As traditional finance, embodied by giants like BlackRock, continues to dominate the stock market, crypto and stablecoins are starting to play an increasingly central role. Tether’s results show that agility and adaptability can outpace the scale and complexity of the largest players in the market.
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