TETHER (The Epitome of Business Modelry)

“Think about 2020: imagine a room full of people—the greatest names in our industry. In that room, everyone was looking at each other, then looking at us, and whispering, ‘Those guys are the black sheep; those guys are going down.’ Fast forward four years, and in that room, there’s no more whispering—because, basically, there’s only us.”

Paolo Ardoino x CEO of Tether

($100 Billion stablecoin company that owns more U.S. Treasuries than most countries and central banks)

Fiat currency can take between 1-7 days to transfer and even worse during weekends because of the nature of the global banking system that doesn’t operate for 24 hours every day. The idea behind Tether (USDT) at its founding was to use blockchain technology as a tool that they could put the most used fiat currency (i.e. the US dollar) in the world on. At the time, layer 1 blockchain platforms with ample potential for programmability like Ethereum didn’t exist; so the only available “transport layer” was Omni Layer (i.e. a colored coin solution built on the Bitcoin blockchain), which was designed for the sole purpose of creating tokens.

Since then, Tether has evolved over the years, now existing as an ERC-20 token and expanding across multiple chains, including Solana, Polkadot, Cosmos, Ton, Eos, Tron and more. To put it simply, 1 USDT is equal to US$1, so it’s a stablecoin that is pegged to the US dollar. The transparency section on their website provides an in-depth “Reserves Breakdown” of their Cash & Cash Equivalents & Other Short-Term Deposits that represent their dollar holdings.

For the most part, Tether functions as a crucial bridge between the traditional financial system and the cryptocurrency ecosystem–it acts as an efficient on/off ramp. It is amongst the most common ways for crypto natives to fund their crypto wallets, enabling them to purchase cryptocurrencies as desired. 

While holding Tether as a stablecoin is a common strategy for individuals aiming to avoid the volatility of other cryptocurrencies, people in countries like Turkey, Venezuela and Argentina also use Tether to protect their earnings against economic instability and currency devaluation. This trend also suggests a gradual shift from traditional financial institutions to cryptocurrency platforms in emerging markets. 

Notably, Tether currently ranks as the third-largest cryptocurrency globally, trailing only Bitcoin and Ethereum, with a market cap exceeding US$120 billion. In the first 6 months of this year, they did US$5,2 billion in profit (~US$1 billion per month). According to Token Terminal, as of early 2024, Tether controls approximately 75% of the entire stablecoin market. These significant milestones highlight Tether’s dominance in the crypto industry as well as its reliability as a widely-used stablecoin. Mind you, they’ve managed to achieve all of this with less than 100 employees–talk about a sustainable business model:

The numbers continue to suggest that TradFi (i.e. Traditional Finance) cannot keep up with the future that is crypto!

Driven predominantly by its rising demand as a stablecoin and smart investments in Bitcoin and Gold, Tether generated more profit than BlackRock, the world’s largest asset manager, in the 2023 financial year:

Although Tether has a stronghold on the stablecoin market and represents a shift in consumer behaviour, I believe institutions like M^0 are more representative of what the endgame in this space looks like. Tether is proof that there is a product-market fit for a new type of digital money that is minted in a completely different way (from how it’s currently done by central banks) and is international from its inception. M^0 is exactly this–its DNA is global:

In essence, Tether’s story embodies the epitome of business modelry: lean, agile, and unapologetically bold. What started as a risky experiment has evolved into a financial force—a blueprint of modern efficiency that spans far beyond stablecoins. With fewer than 100 employees and over $120 billion in market cap, Tether has redefined what it means to scale—without losing agility. In 2020, they were the outsiders in a room full of skeptics; now, they’re the standard. Tether isn’t just proving the model works—it’s rewriting it, leaving whispers and doubts long behind.