Is Tether the Best Business in the World?
1555 sats \ 10 comments \ @kr 1 Feb crypto
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.
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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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374 sats \ 0 replies \ @nkmg1c_ventures 2 Feb
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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20 sats \ 0 replies \ @kingzing131 2 Feb
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
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26 sats \ 0 replies \ @kr OP 1 Feb
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443 sats \ 0 replies \ @ablunderfilledlife 1 Feb
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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422 sats \ 0 replies \ @kurszusz 1 Feb
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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0 sats \ 0 replies \ @thebitcoinbugle 6 Feb
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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