Tether Targets $500 Billion Valuation with $20 Billion Stake Sale - 3% Equity on the Block

Tether's power play shakes the crypto foundations as the stablecoin giant aims for Wall Street validation.

Valuation Gambit

The company behind USDT pushes for a landmark $500 billion valuation - a figure that would dwarf traditional finance institutions. Selling just 3% equity to raise $20 billion reveals Tether's confidence in its market position.

Capital Formation Strategy

This isn't just another funding round. Tether's move signals a strategic shift toward institutional legitimacy while maintaining overwhelming control. The math speaks volumes: $20 billion for a sliver of equity demonstrates unprecedented market confidence.

Market Implications

The proposed valuation would make Tether more valuable than most traditional banks - quite the achievement for a company that supposedly just 'prints stablecoins.' Maybe those banking skeptics should check their balance sheets again.

Tether's bold valuation play could redefine crypto's place in global finance - if traditional investors can stomach the volatility of their own industry being disrupted.

Tether outpaces Circle as it cashes in on U.S. Treasuries

Tether runs the USDT token, the largest stablecoin by far, with a market cap of $172 billion. It’s tied to the U.S. dollar and way ahead of second-place USDC, which sits at $74 billion and is managed by publicly listed Circle Internet Group Inc. Circle was valued at $30 billion earlier this week, a fraction of what Tether is now targeting.

Tether has been stacking profits by investing customer reserves into short-term U.S. Treasuries and other cash-like assets. In Q2, it claimed $4.9 billion in net income. CEO Paolo Ardoino told attendees in Seoul that the company enjoys a 99% profit margin. These numbers aren’t subject to public market standards or outside audits, but they’ve made Tether one of the most profitable players in the space.

And unlike Circle, Tether has no interest in going public. Paolo said, “I don’t want to spend the next three months in every single quarter of my life trying to explain to analysts why we are not optimizing to make two cents more.” Last year, the company pulled in $13.7 billion in profit, and Paolo insists that’s more than enough to fund its operations without needing a stock listing.

Tether’s growth hasn’t just been about minting tokens. It’s also built out infrastructure. Paolo said Tether doesn’t rely on revenue-sharing deals with platforms like Coinbase, which Circle uses to distribute its coin. “We don’t have, like our competitors, to rent out the distribution channels. We own them,” he said.

Tether prepares for U.S. return under Trump-friendly policies

Tether is now quietly re-entering the U.S. market, encouraged by the return of President Donald TRUMP and his pro-crypto stance. The company had kept a low profile in the States after a $41 million fine in 2021 over misleading reserve disclosures. But with Trump back in the White House, Tether is betting big on U.S. expansion.

As part of that comeback, the company has unveiled plans for a U.S.-regulated stablecoin, led by Hines, who used to serve in the Trump WHITE House. Over the past few weeks, potential investors were given access to a data room to review internal numbers before the raise wraps by year-end.

Tether’s next product for the U.S. is a new token called USAT, which aims to offer instant settlement and lower fees for domestic users. The token is being built in partnership with Cantor Fitzgerald LP and Anchorage Digital Bank NA. Hines said the product targets “consumers that have been underbanked or underserved for quite some time and don’t want to pay insane amounts for transaction fees when they’re just moving money to friends and family.” Tether also plans to offer USAT to enterprise clients, including banks.

Paolo, who shared the stage with Hines in Seoul, said Tether’s competitive edge is the network it has built over the last 11 years, and that they’ll keep investing in it rather than handing over control to distribution partners. While Circle is still chasing market share with Coinbase, Tether is doubling down on what it already owns.

The company has already spent $5 billion in the United States. That includes a $775 million investment in Rumble Inc., a video platform known for its right-wing user base. Paolo said the company plans to continue investing in similar ventures, using its cash reserves instead of raising from public markets.

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