Valuation of $500 billion dreams cool down: Tether's funding target slashed by 75%

Title: Tether Retreats from $20 Billion Funding Ambitions After Investor Pushback

Author: Jill R Shah, Financial Times

Compiled by: Peggy, BlockBeats

Editor’s Note: Against the backdrop of a cooling crypto market and pressured valuation narratives, Tether finds itself in a delicate position. On one hand, the expansion of USDT continues, making it an “innovative financial player” in the U.S. Treasury and gold markets; on the other hand, with a valuation expectation of up to $500 billion, an incomplete full audit, and longstanding regulatory and compliance controversies, potential investors remain cautious.

Tether’s next move may reflect not only its own choices but also the broader reality facing the stablecoin industry.

Below is the original article:

Tether CEO Paolo Ardoino said, “The money these AI companies make is about the same as ours, just with a negative sign in front.”

As investors question its $500 billion valuation target, the world’s largest stablecoin issuer Tether’s CEO has proactively lowered expectations and attention regarding its fundraising scale.

This crypto group registered in El Salvador had initiated fundraising negotiations last year, aiming to raise $15 billion to $20 billion. If successful, it would rank among the most valuable private companies globally.

However, according to informed sources, after encountering investor hesitation, Tether’s advisors have begun exploring the possibility of raising only about $5 billion.

Ardoino has scaled back the potential fundraising amount, stating that the previous target of $15 billion to $20 billion was “a misunderstanding.”

“That number is not our goal; it’s just the ceiling we’re willing to sell,” he said in an interview. “Even if we don’t sell a single dollar, we would still be very satisfied.”

Ardoino noted that Tether is highly profitable and has received “significant interest” at the $500 billion valuation level. He added that the company has not yet decided how much equity to sell, partly because internal stakeholders are reluctant to dilute their holdings.

The company’s USD-pegged stablecoin USDT currently has a market cap of about $185 billion and is regarded as a “reserve currency” in the digital asset market. Control of Tether is concentrated in the hands of a small group of long-serving executives.

The market has been closely watching Tether’s progress in bringing in well-known investors, viewing it as an important indicator of investor interest in the crypto industry. It is widely believed that this move is more about consolidating Tether’s reputation and network of contacts, as the company generates billions in profit annually and does not urgently need new capital.

After Trump was elected president, the market was once boosted by expectations that U.S. regulation would become more friendly, lifting digital asset prices; but over the past six months, as traders withdrew from high-risk speculative assets, the crypto market experienced a significant decline.

Some investors privately expressed concerns about the $500 billion valuation, which would place Tether among the top non-listed companies, alongside AI firms like OpenAI and Anthropic, as well as Elon Musk’s SpaceX and ByteDance, TikTok’s parent company.

Ardoino stated that Tether—whose profits last year were approximately $10 billion, mainly derived from the yield of assets backing USDT—should be valued similarly to these still-loss-making AI companies.

“These AI companies make about the same as us, just with a negative sign in front,” he said. “If you’re willing to believe that a certain AI company with a huge negative sign is worth $800 billion, that’s your freedom.”

Tether and its fundraising advisor Cantor Fitzgerald both declined to comment on the current round’s scale. The investment bank, managed by the children of U.S. Commerce Secretary Howard Lutnick, also holds shares in Tether.

Sources caution that negotiations are ongoing, and terms may still change; if the overall crypto market recovers, investor sentiment could also reverse.

Tether’s efforts to attract heavyweight investors have long been seen as an important signal of investor interest in the crypto industry.

Ardoino said that the recent U.S. stablecoin legislation signed into law by Trump, along with the listing of U.S.-based competitor Circle last year, has further increased market attention and momentum for Tether. Recently, Tether also launched a new compliant token in the U.S.

However, sources say some potential investors remain cautious about regulatory risks surrounding Tether. Since its founding in 2014, the company has faced ongoing scrutiny, mainly over whether its tokens are used for illegal activities and issues related to transparency and quality of its asset reserves.

In recent years, Tether has begun regularly publishing quarterly attestations of reserves through accounting firm BDO Italia, but has yet to undergo a full independent audit.

Ardoino stated that the company has demonstrated its technical capabilities in cooperation with multiple law enforcement agencies worldwide to prove its compliance and enforcement cooperation.

S&P Global Ratings downgraded Tether’s reserve rating to the lowest tier within its system at the end of last year, citing increasing exposure to high-risk assets like Bitcoin and gold. Ardoino responded at the time, “We take pride in your aversion.”

Since 2020, USDT’s growth has accelerated significantly, making Tether one of the largest buyers of U.S. Treasuries globally and, in recent months, an important participant in the gold market.

Such large-scale asset allocation makes Tether one of the most critical links between the global financial system and the highly volatile crypto world.

Compared to the previous year, Tether’s profit in 2025 has decreased by about a quarter. Ardoino attributed this change to the decline in Bitcoin prices. He also added that benefiting from rising precious metal prices, the company gained approximately $8 billion to $10 billion in profits from its gold holdings.