Bullish on CeDeFi & RWA as Tether Dominates Q1 2024
I am more so ever bullish on RWA and my thesis for a CeDeFi environment becomes solidified with Tether achievements out pacing decades old financial institutions.
Goldman Sachs and Morgan Stanley fell to Tether, who topped the profitability charts in Q1 2024:
- 10x Ethereum's earnings
- Record breaking profitability
Not only it generate astonishing earnings, its revenue per employee shocked everyone.
Breaking down how Tether, the issuer of USDT stablecoin, fought alongside the shoulder of giants 📈💸
1️⃣ Staggering Earnings
Tether reported a staggering $4.52 billion in profit, dwarfing the entire Ethereum chain’s earnings by 10x. This highlights a monumental shift in the financial landscape, where a stablecoin issuer exceeds traditional banking titans in profitability.
2️⃣ Per Employee Earnings
An astonishing figure of $45.2 million profit per employee showcases Tether’s efficiency, being 485 times higher than Goldman Sachs, the next in line. This efficiency speaks volumes about the streamlined operations and strategic financial maneuvers of Tether.
🔍 How Does Tether Generate Income?
• Investments in Securities
Tether takes the funds received for USDT and invests in securities, such as US Treasuries, which currently yield around 5% annually. This strategy allows Tether to earn substantial interest income while maintaining the peg of USDT.
• Commodities and Cryptocurrency
Tether diversifies its investment portfolio by allocating part of the funds into volatile assets like Bitcoin and gold. Recent upticks in these markets have resulted in significant mark-to-market gains for Tether, bolstering its financial standing further.
With a market cap soaring to approximately $110 billion and still climbing, Tether is well-positioned to capitalize on the ongoing bull market and the narrative of RWA will catch up stronger now.
This is underpinned by a simple yet profoundly effective business model. If you realize, there is no complex tech, just strategic financial investments that are paying off massively.
We could see a stablecoin narrative going strong too.
I am genuinely excited for @ethena_labs.
Twitter:
Tether is a giant. It’s funny to still see people on Reddit call it a scam.