Tether, the company behind the world's largest stablecoin USDT, is reportedly in discussions with investors for a new funding round that could value the firm at approximately $500 billion. According to a report from Bloomberg, the stablecoin issuer is aiming to raise between $15 billion and $20 billion.
If the fundraising is successful at this valuation, Tether would become one of the most valuable private companies globally, placing it in a similar league to technology giants like OpenAI and SpaceX. The potential deal is reportedly being advised by Cantor Fitzgerald, which is also a known shareholder in the company.
Key Takeaways
- Tether is reportedly exploring a funding round to raise $15 billion to $20 billion.
- The potential deal could value the stablecoin issuer at around $500 billion.
- Investment firm Cantor Fitzgerald is said to be advising on the transaction and is an existing shareholder.
- A Tether executive has publicly stated the company has no plans to raise capital, creating conflicting reports.
- A $500 billion valuation would make Tether's competitor, Circle, which is valued at $30 billion, appear significantly smaller by comparison.
Details of the Proposed Fundraising
According to the Bloomberg report, which cited two anonymous sources familiar with the matter, Tether is targeting a significant capital injection. The goal is to raise between $15 billion and $20 billion in exchange for approximately 3% of the company's equity.
The sources indicated that this transaction would involve issuing new shares rather than allowing existing investors to sell their stakes. This structure suggests the capital would be used for expansion or strategic initiatives rather than providing an exit for early backers.
However, another individual reportedly involved in the process noted that these figures represent top-end targets. The final numbers for both the amount raised and the valuation could be substantially lower than the initial goals.
Understanding Stablecoins
Stablecoins are a type of cryptocurrency designed to maintain a stable value by pegging to a reserve asset, most commonly the U.S. dollar. Tether's USDT is the largest stablecoin, with its value intended to remain at $1. It is widely used in the crypto ecosystem for trading and as a store of value, providing liquidity and stability in a volatile market.
Market Position and Valuation Context
Tether holds a dominant position in the cryptocurrency market as the issuer of USDT, the most widely used stablecoin. The total supply of USDT currently stands at $172 billion, making it a critical piece of infrastructure for global digital asset trading.
A $500 billion valuation would be a landmark achievement for any company in the digital asset space. It would place Tether in an elite group of private firms, alongside Sam Altman's OpenAI and Elon Musk's SpaceX, which are considered leaders in artificial intelligence and aerospace technology, respectively.
Tether vs. Circle
To put the potential valuation into perspective, Tether's closest competitor is Circle Internet Group, the issuer of the USDC stablecoin. Circle has a supply of $74 billion in its USD-pegged tokens and, following its recent initial public offering, holds a market valuation of approximately $30 billion. A $500 billion valuation would make Tether more than 16 times more valuable than its main rival.
Tether's financial performance underscores its significant role in the market. The company has been described as one of the most profitable in the crypto industry, reporting a net profit of $4.9 billion for the second quarter of this year alone. This level of profitability likely fuels investor interest and supports the high valuation target.
The Role of Cantor Fitzgerald
Investment firm Cantor Fitzgerald is reportedly playing a central role in these discussions, acting as the lead advisor on the potential deal. The firm's involvement is notable as it is also a shareholder in Tether. Until recently, Cantor Fitzgerald was led by Howard Lutnick, a prominent figure in finance.
A previous report from The Wall Street Journal in 2024 revealed that Cantor Fitzgerald had acquired a 5% ownership stake in Tether. At the time, this stake was valued at as much as $600 million.
If Tether achieves its $500 billion valuation target, Cantor Fitzgerald's 5% stake would see an extraordinary increase in value. Simple calculations suggest the firm's holdings would be worth $25 billion, representing a substantial return on its initial investment and highlighting the immense financial implications of the proposed deal for its backers.
Contradictory Statements from Tether
Despite the detailed report from Bloomberg, a Tether executive has publicly denied any plans for a capital raise. Speaking at a conference in Seoul, Bo Hines, the CEO of Tether's newly formed U.S. division, stated that the stablecoin firm "has no plans to raise money."
This direct contradiction adds a layer of uncertainty to the situation. It is common for companies to deny fundraising talks publicly until a deal is finalized. The conflicting information leaves the market to weigh the credibility of the anonymous sources against the official company statement.
Tether's U.S. unit was recently established as part of the company's efforts to expand its offerings, including plans to launch a new USD-pegged stablecoin specifically for the U.S. market. The company did not provide an immediate official response to email requests for comment regarding the Bloomberg report.
