Tether Reportedly Seeks $20B Funding, Eyeing a $500B Valuation

Tether, the issuer of the world's largest stablecoin, USDT, is reportedly in talks with investors to raise up to $20 billion in a private placement that could value the company at a colossal $500 billion. This ambitious fundraising effort, first reported by Bloomberg, will put Tether in the same league as tech behemoths like OpenAI if successful.

According to the report, which cited people familiar with the matter, the El Salvador-based company is considering selling a 3% equity stake, with Cantor Fitzgerald acting as the lead adviser. Discussions are said to be in the preliminary stages and the final amount could be subject to change.

The potential half-a-trillion-dollar valuation is a testament to Tether's immense profitability. The company recently reported $4.9 billion in profit for the second quarter alone. This financial success is largely driven by the widespread adoption of its USDT stablecoin, which is pegged to the US dollar and plays a crucial role in the global crypto trading ecosystem.

Tether CEO Paolo Ardoino confirmed on X that the company is "evaluating a capital raise from a group of high-profile investors," stateing that the goal is to "expand Tether's strategy across stablecoins, distribution, AI, commodity trading, and other areas by several orders of magnitude.”

This news comes at a time of significant expansion for Tether, particularly in the United States. The company recently launched a new US-compliant stablecoin, USAT, and appointed Bo Hines, a former White House crypto adviser under President Donald Trump, to lead its US operations.

Tether's reported $500 billion valuation stands in stark contrast to its main competitor, Circle. The issuer of the second-largest stablecoin, USDC, went public in June this year, raising $1.05 billion at an implied valuation of $8.06 billion. Circle has a strong regulatory footing, having received a BitLicense from the New York State Department of Financial Services and pursuing a national bank charter.

The vast difference in valuation between Tether and its rivals highlights the market's perception of their respective business models and growth potential. While Circle has all along emphasized regulatory compliance and institutional partnerships, Tether has captured a larger share of the global crypto trading market, despite facing scrutiny over the transparency of its reserves in the past.