Will Tether be able to earn $15 billion in 2025? Can the "financial alchemy" model be sustained?

The world's largest stablecoin issuer Tether expects to achieve an astonishing profit of $15 billion by 2025, placing it among the most profitable companies globally. The USDT, with a market capitalization of $183.2 billion, primarily generates revenue through holding low-risk assets such as U.S. Treasury bonds, while the company also holds 87,475 Bitcoins valued at nearly $10 billion. However, barriers to market access in the European Union, downward pressure on interest rates, and competition from traditional financial institutions pose severe challenges to the ongoing profitability of this encryption giant.

Profit Model Analysis: The Financial Alchemy Behind Stablecoins

Core Business Mechanism

Tether builds its business model by issuing USDT stablecoins that are pegged to the US dollar at a 1:1 ratio. As the third largest digital currency globally, USDT currently has a market capitalization of 18.32 billion USD, which is a 50% increase compared to the same period last year. The company's core profits come from the earnings generated by low-risk assets reserved for each unit of USDT.

During the COVID-19 pandemic, the soaring interest rate environment made this business model exceptionally profitable. The company's reserves are mainly allocated to:

• U.S. Treasury Bonds: Provide stable and tax-free Intrerest Rate income
• Money Market Fund: Achieve market returns while maintaining high liquidity.
• Cash Equivalents: Ensure that user redemption needs are met at all times.

Bitcoin strategic allocation

In addition to traditional fixed income assets, Tether has made significant strategic allocations to Bitcoin. According to data from BitcoinTreasuries.net, this private company holds 87,475 Bitcoins, valued at nearly 10 billion USD at current prices. This allocation not only provides Tether with asset diversification but also allows it to benefit from the rise in Bitcoin prices.

Capital Expansion and Valuation: Market Positioning of Private Giants

profitability industry comparison

Tether CEO Paolo Ardoino described the company's profitability as “very rare.” If the data is accurate, this assessment is not an exaggeration. An annual profit of $15 billion means:

• Daily Earnings: 41 million USD
• Hourly Earnings: 1.7 million USD
• Earnings per minute: 28,538 USD
• Earnings per second: 475 USD

Matt Hougan, Chief Investment Officer of Bitwise, even predicts that Tether could surpass Saudi Aramco to become the most profitable company in the world. Calculations show that if Tether manages $3 trillion in assets in the future, its income from Intrerest Rate will exceed the $12 billion annual revenue of this oil giant last year.

Financing Plans and Valuation Prospects

Despite having ample cash, recent reports indicate that Tether is planning to raise $20 billion by selling 3% of its shares. This transaction would value it at approximately $500 billion, surpassing tech giants like Netflix and Samsung, and approaching the market capitalization level of traditional financial brands such as Mastercard.

Diversification Strategy: Cross-Industry Layout from Football Clubs to AI

strategic investment portfolio

Tether is building a broad portfolio, with a strategic layout that has gone beyond the traditional cryptocurrency space:

• Sports Industry: Acquired a stake in the Italian football club Juventus, becoming its second-largest shareholder. Ardoino even expressed the desire to fully acquire the team.
• Mining Investment: Involved in Bitcoin mining startups
• Blockchain Analysis: Invest in Crystal Intelligence, layout on-chain data analysis

Future Development Direction

Ardoino stated that the potential financing will help the company expand into numerous other business areas, including “artificial intelligence, commodity trading, energy, communication, and media.” This diversification strategy aims to reduce dependence on the stablecoin business and seek new growth points for substantial profits.

Sustainability Challenges: Dual Pressure of Regulation and Competition

market access restrictions

Although Tether holds an undisputed market leadership position in the stablecoin space, especially in emerging economies seeking access to digital USD, it faces significant market entry barriers:

• EU Market: Due to non-compliance with MiCA regulations, USDT cannot circulate in the EU region with a population of 450 million.
• U.S. Market: Plans to launch a new stablecoin USAT that complies with U.S. regulations to meet regulatory requirements.

Evolution of Competitive Landscape

With the advancement of the GENIUS Act, the threat of Financial Institutions issuing stablecoins is increasing.

• Existing Competition: Circle's USDC currently ranks second with a market capitalization of 76 billion USD.
• Potential Threat: Nine Wall Street banking giants are collaborating to develop a joint stablecoin focused on G7 currencies.

Macroeconomic Risk

The Federal Reserve may enter a rate cut cycle under pressure from Trump, which will directly affect the returns Tether receives from its reserve assets. Lower yields mean that the company's profit growth will increasingly rely on the continued expansion of USDT market capitalization.

Industry Impact and Future Outlook: The Reshaping of the Stablecoin Market

Regulatory Compliance Path

The key challenge facing Tether is how to maintain growth in an increasingly stringent global regulatory environment. The company needs to:

• Adapt to the regulatory requirements of different jurisdictions
• Increase reserve transparency and audit frequency
• Establish a stronger risk management and compliance framework

The Role of Technological Innovation

With the evolution of blockchain technology, Tether may need to invest in:

• More efficient settlement network
• Cross-Chain Interoperability Solutions
• Compliance Monitoring and Anti-Money Laundering Technology

Market Education and Trust Building

As a private company, Tether needs to continue to strengthen market trust:

• Increase Operational Transparency
• Strengthen communication with regulatory agencies
• Build a stronger brand reputation

Conclusion

The rise of Tether is one of the most remarkable success stories in the cryptocurrency industry, with its profitability even surpassing that of most Financial Institutions. However, the company stands at a crossroads: on one hand, its unprecedented profit-generating capability, and on the other, an increasingly complex regulatory environment and competitive pressure.

For the cryptocurrency industry, the future development path of Tether is of significant indicative meaning. If the company can successfully navigate regulatory challenges, achieve business diversification, and maintain its market leadership, it will set a new benchmark for the entire industry. Conversely, if its growth slows under competitive and regulatory pressure, it may signal a major reshaping of the stablecoin market landscape.

Regardless of the outcome, Tether's story has demonstrated the core value of stablecoins in the modern financial system. As digital assets continue to integrate into mainstream finance, how Tether balances profitability, compliance requirements, and technological innovation will become an important window for observing the maturity of the cryptocurrency industry.