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Crypto vs. TradFi: Tether’s 2023 Earnings Rival World’s Largest Banks


In 2023, Tether made waves in the financial sector by generating an astonishing $6.2 billion in net income. According to Teddy Fusaro, president at Bitwise, this figure closely competes with banking giants like Goldman Sachs and Morgan Stanley.

Remarkably, Tether achieved this with approximately 100 employees, showcasing an unprecedented level of efficiency.

Will Traditional Finance (TradFi) Institutions Rush Towards Crypto?

The company’s performance is particularly striking when compared to traditional banking behemoths. For instance, Tether’s income per employee is at least 380 times more than that of JPMorgan, one of the world’s largest banks by market cap.

This disparity highlights the crypto firms’ technological leverage to maximize profitability.

Institution Name Total Deposits as of December 31, 2023 (in millions) FY 2023 Net Income Total Workforce Net Income per Employee
JPMorgan $2,400,688 $47,760 293,723 $162,602
Goldman Sachs $428,000 $7,907 48,500 $163,031
Morgan Stanley $346,000 $8,530 82,000 $104,024
Tether $97,020,395 $6,180 100 $61,800,000
Top Multinational Bank’s Net Income Compared to Tether. Source: Maelstrom/X (Twitter)

However, Tether’s success has sparked discussions within the financial ecosystem. Some community members believe that its ascendancy, especially in the stablecoin market, with USDT surpassing $100 billion in circulation, could prompt legacy financial entities to explore cryptocurrency more seriously.

Nevertheless, Tether’s management remains optimistic. CEO Paolo Ardoino views the company’s market dominance as beneficial, particularly for sectors that rely on stablecoins.

He stresses Tether’s proactive approach to engaging with global regulators to ensure a comprehensive understanding of the technology.

“Tether’s market domination may be a ‘negative’ for competitors including those in the banking industry wishing for similar success but it’s never been a negative for the markets that need us the most,” Ardoino said.

Stablecoin Market Dominance
Stablecoin Market Dominance. Source: DefiLlama

Moreover, Tether is branching into Artificial Intelligence (AI), aiming to make AI technologies more accessible and efficient. By investing in sectors like renewable energy and Bitcoin mining, Tether is positioning itself as a leader in AI, advocating for open-source and transparent practices.

This strategic move comes as discussions around the centralization of AI technologies gain momentum. Through its commitment to open AI models, Tether aims to promote innovation and prevent monopolistic practices in the industry.

However, not everyone views Tether’s activities positively. The X account Bitfinex’d accuses Tether and Bitfinex of engaging in fraudulent activities, including money laundering.

“It’s money laundering. Criminal activity is very profitable for a while,” Bitfinex’d said.

These allegations, along with past regulatory penalties, including a settlement with the New York Attorney General and a $41 million fine from the US Commodity Futures Trading Commission, add a layer of controversy to Tether’s narrative.

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Conclusion

In conclusion, Tether’s remarkable financial success in 2023, with $6.2 billion in net income and unparalleled efficiency with only 100 employees, has generated significant attention in the financial industry. The comparison of Tether’s income per employee with traditional banking giants like JPMorgan highlights the crypto firm’s technological advantage in maximizing profitability. There is speculation that Tether’s dominance in the stablecoin market could prompt traditional financial institutions to further explore cryptocurrency. Tether’s strategic expansion into Artificial Intelligence and commitment to transparency and regulatory engagement position it as a leader in leveraging technology for market advantage. However, allegations of fraudulent activities and past regulatory penalties add a layer of controversy to Tether’s narrative.

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