Ripple Reacts to Tether Profits and Enters the Market

Analyst Panos Mekras noted that one of the main reasons Ripple is entering the stablecoin market may be to compete for a significant share of the profits earned by Tether, the issuer of the popular USDT stablecoin. In 2023, Tether reported profits of up to $6.2 billion.

Mekras shared his thoughts in a recent post on the X platform, reacting to the estimated earnings of Tether for the previous year.

Meanwhile, Teddy Fusaro, the CEO of Bitwise, drew attention to these estimates, referring to data collected by analysts from Maelstrom based on publicly available financial data.

According to the report, Tether achieved a net profit of $6,175,826,809 in 2023, representing a significant increase of 128.65% compared to $2.7 billion from the previous year.

Fusaro emphasized that Tether's profits are impressive, comparing them to the financial results of giants like Goldman Sachs and Morgan Stanley.

He cited that Tether's $6.2 billion profit accounts for approximately 78% of Goldman Sachs' $7.9 billion earnings for 2023, despite Tether employing only 100 employees compared to Goldman Sachs' 48,500.

Similarly, Tether's profits make up 72% of Morgan Stanley's $8.53 billion earnings, with 82,000 employees.

Mekras highlighted that Tether's impressive profits for 2023, as the most well-known stablecoin provider, are one of the main factors that prompted Ripple to take action in the stablecoin market.

According to him, if Ripple can effectively execute its strategy, it could secure a significant position in the market and achieve substantial profits, as "stablecoins are the most critical element of the cryptocurrency economy and DeFi world."

Ripple recently announced plans to introduce a USD-backed stablecoin on its XRPL platform. According to Ripple, the stablecoin market will be worth nearly $3 trillion in four years, providing further rationale for the company to enter this space.

Ripple's CEO, Monica Long, underscored the importance of stablecoins for decentralized finance, stating that issuing USD-backed stablecoins on XRPL and Ethereum platforms will be crucial for unlocking new opportunities for DeFi and institutional applications.

*this is not a financial advice