Tether Holdings, the issuer of the world’s largest stablecoin USDT, is pursuing one of the most ambitious private funding rounds in recent memory, seeking between $15 billion and $20 billion in new capital that could value the company at approximately $500 billion. This extraordinary valuation would place the cryptocurrency firm alongside tech giants like OpenAI and SpaceX, representing a remarkable achievement for a company operating in the lightly regulated digital asset space. The funding round involves issuing new equity for roughly a 3% stake rather than secondary sales, with Cantor Fitzgerald serving as the lead adviser and CEO Paolo Ardoino confirming discussions with “high-profile key investors.”
The stablecoin issuer’s financial performance justifies investor interest, with Tether reporting an impressive $4.9 billion profit in the second quarter alone and claiming profit margins of approximately 99%. The company generates revenue by investing reserves backing its $172 billion USDT token supply in cash-equivalent assets, primarily US Treasuries. This business model has proven extraordinarily lucrative, especially during periods of higher interest rates, though potential rate cuts could moderate future earnings. Tether’s dominance in the stablecoin market far exceeds its closest competitor, Circle’s USDC, which maintains a market capitalization of about $74 billion.
The timing of this fundraising coincides with Tether’s strategic pivot toward US market re-entry after years of regulatory challenges. The company recently announced USA₮, a new dollar-backed token designed to strengthen USD dominance in digital markets, and appointed former White House crypto official Bo Hines to lead US expansion efforts. This move aligns with shifting US crypto policy, including the proposed GENIUS Act that could expand stablecoin adoption among traditional financial institutions like banks and card networks.
A successful capital raise would provide Tether with substantial resources to defend its market leadership position while investing in infrastructure, compliance, and product development during a critical period for the stablecoin industry. However, the company faces ongoing challenges including its history of regulatory issues, having paid a $41 million fine in 2021 for reserve misrepresentation allegations. As investors evaluate the opportunity through recently opened data rooms, they must weigh Tether’s exceptional profitability against potential policy risks and the sustainability of its business model amid changing interest rate environments.
