Tether Seeks $20B Raise at $500B Valuation

The proposed private placement represents one of the largest fundraising attempts by a private company in recent memory. According to Bloomberg’s report citing two unnamed sources, Tether is seeking to raise between $15 billion and $20 billion, which would value the stablecoin giant at approximately $500 billion based on the roughly 3% stake being offered. Investment bank Cantor Fitzgerald has been tapped as the lead adviser for the transaction, with potential investors already gaining access to a data room as they evaluate their participation. The publication noted that discussions remain in initial stages and the final deal terms could change significantly, with one source indicating the fundraising target might ultimately be much lower.

Notably, the deal would involve the issuance of new shares rather than existing investors selling their equity, suggesting Tether is seeking fresh capital for expansion rather than providing liquidity to early backers. Bloomberg reported that a deal is expected to close by year’s end if successful. The timing coincides with a notably more favorable regulatory environment for stablecoins in the United States following the passage of the Genius Act, which greenlighted the issuance and trading of these digital assets.

The proposed valuation finds strong support in Tether’s recent financial performance. According to the company’s own attestation from July, Tether generated a net profit of $5.7 billion through the first six months of 2024, with an astonishing $4.9 billion of that coming in the second quarter alone. During the same period, the company issued $20 billion in new USDT, bringing its total market capitalization to $172 billion according to crypto data provider CoinGecko. This positions Tether’s flagship stablecoin at more than double the value of its closest competitor, Circle, which has a market cap of $74 billion.

Tether’s proposed $500 billion valuation would place it among the world’s most valuable private companies, alongside artificial intelligence developer OpenAI and Elon Musk’s space transport company SpaceX, both of which have received similar valuations. The comparison is particularly striking given that Tether operates in the digital assets space rather than traditional technology or aerospace sectors. Meanwhile, Circle’s recent public market debut on the New York Stock Exchange saw its stock nearly quadruple from its initial offer price of $31, giving the company a valuation above $30 billion according to Yahoo Finance data—still significantly below Tether’s current private market aspirations.

The fundraising effort comes amid significant strategic expansion for Tether, including plans to launch USAT, a U.S.-specific stablecoin designed to cater to different use cases than the company’s flagship USDT. During a White House visit in July shortly before the passage of the Genius Act, Tether CEO Paolo Ardoino revealed these plans to Decrypt, signaling the company’s intention to deepen its presence in the American market. In September, Tether named Bo Hines, former executive director of the White House’s digital assets working group, to serve as USAT’s CEO, further strengthening its regulatory and political connections.

The regulatory environment has shifted dramatically in favor of stablecoin issuers under the Trump administration, with the Genius Act providing clear pathways for the issuance and trading of these digital assets. This political backdrop likely contributes to Tether’s confidence in pursuing such an ambitious valuation. However, in a curious development, Bloomberg separately reported that Hines stated during a conference in Seoul on Tuesday that Tether has no plans to raise money, creating some uncertainty around the timing and certainty of the proposed deal.

Tether’s diversification strategy extends beyond stablecoins, with the company counting Bitcoin and gold among its significant holdings. This approach to reserve management has contributed to both its profitability and its appeal to investors seeking exposure to digital assets with reduced volatility compared to pure-play cryptocurrencies. The proposed $20 billion fundraising, if successful, would provide substantial capital to further expand these strategic initiatives and solidify Tether’s position as the dominant player in the rapidly evolving digital assets ecosystem.