Tether May Eclipse Saudi Aramco As World’s Most Profitable Company, Says Bitwise Cio

What Happened

Tether may become the world’s most profitable company if the stablecoin issuer continues its explosive growth trajectory, according to Bitwise Chief Investment Officer Matt Hougan.

In a September 29 investor memo, Hougan suggests that Tether could surpass even Saudi Aramco’s record-breaking $120 billion profit from 2024, which is the most lucrative year in corporate history.

Market Context

The ambitious valuation projections for Tether first caught Hougan’s attention when news emerged that the stablecoin issuer was seeking to raise capital at a $500 billion valuation.

“OpenAI is working to create artificial general intelligence and SpaceX wants to put people on Mars. Tether basically runs a digital money market fund.”

However, Hougan argues that the comparison becomes less far-fetched when considering Tether’s market positioning and growth potential.

The stablecoin issuer commands nearly 100% of the stablecoin market in non-Western countries, giving it a dominant foothold in emerging markets where dollar-denominated digital currencies are increasingly preferred over volatile local currencies.

“There’s a chance that many emerging market countries will convert from primarily using their own currencies to using USDT,” Hougan noted.

If that happens, Tether could end up managing trillions of dollars and capturing all of the interest.

Hougan’s bullish outlook on Tether reflects a broader thesis about the sheer size of the markets the digital assets aim to disrupt.

He illustrated this concept using Bitcoin, which currently holds a $2.3 trillion market capitalization, equivalent to Amazon’s valuation.

“To be worth $2.3 trillion, [a company trying to disrupt] Amazon would need to take 100% of the market, forcing the Seattle-based giant into bankruptcy,” Hougan explained.

In such massive markets, capturing even a small percentage could potentially make Tether’s historic profit projections more plausible than they initially appear.

Paolo Ardoino, the CEO of Tether, told CryptoNews last year that he is confident Tether USDT will maintain its dominance amid increasing competition from other stablecoins due to the team’s deep understanding of usage.

Why It Matters

Why Tether Could Become the World’s Most Profitable Company

The same logic applies to stablecoins and the traditional payment systems they could potentially replace.

Regarding Tether’s business model and profitability, Ardoino highlighted the impact of current interest rates.

Details

Hougan’s analysis hinges on Tether reaching $3 trillion in assets, which would represent approximately 3% of the global money supply.

“At current interest rates, if Tether got to $3 trillion in assets—about 3% of the global money supply—it would top that, becoming the most profitable company in history,” Hougan stated.

This would place Tether among the world’s most valuable startups, alongside artificial intelligence pioneer OpenAI and aerospace manufacturer SpaceX.

While Amazon serves millions of customers daily, Bitcoin’s value stems from its competition with gold, a $25 trillion asset class.

According to McKinsey data cited by Hougan, the global payments industry processes 3.4 trillion transactions worth $1.8 quadrillion annually.

Tether’s Path to Record-Breaking Profitability

“We made $12 billion in profits in the last two years,” he said.

Even if rates were to drop to 2%, Ardoino noted that Tether has $100 billion in the U.S. Treasuries, and 2% on that is still $2 billion per year.