Tether Seeks $20B Funding at $500 Billion Valuation, Dwarfing Circle

Tether is evaluating a raise from “a selected group of high-profile key investors,” to maximize the scale of the company’s strategy across all existing and new business lines, “by several orders of magnitude,” stated CEO Paolo Ardoino on Wednesday.

The stablecoin issuer is looking to raise between $15 billion and $20 billion for a roughly 3% stake through a private placement, reported Bloomberg, citing people familiar with the matter.

The raise would value Tether at around $500 billion, putting it alongside tech giants like OpenAI and SpaceX. This would dwarf its closest rival, publicly traded Circle, which is worth about $30 billion.

Tether to Return to The US

The transaction would involve new equity rather than existing investors selling their stakes, and Cantor Fitzgerald is acting as the lead adviser. The El Salvador-based firm has generated massive profits from investing stablecoin reserves in US Treasurys and other cash-like assets. Tether made $4.9 billion in the second quarter, and Ardoino claims it has a 99% profit margin.

Tether faced a lot of pushback and regulatory hurdles under the anti-crypto Biden administration, but it is furthering plans to return to the US under the new pro-crypto Trump administration. The firm named a new CEO, former White House crypto official Bo Hines, for its US business. It also launched a new stablecoin for American markets called USAT, which will be regulated under the GENIUS Act.

Beyond stablecoins, Tether plans to use funds for diversification into AI, commodity trading, energy, communications, and media sectors.

Lumida Wealth Management founder Ram Ahluwalia said, “Last year, I noted we wanted to own a slice of Tether, and got a lot of funny looks. It’s one of the best businesses in the world.”

Meanwhile, Arthur Hayes said it would spell the end for Circle.

Tether Supply Keeps Growing

The circulating supply of USDT is currently at a record high of $173 billion, giving it a market share of 56% of the total stablecoin supply. Its closest rival, USDC, has a supply of $74 billion, giving it a market share of 25%.

Tether supply has grown 26% since the beginning of this year as stablecoin demand has surged, driven by the passage of the GENIUS Act earlier this year.

Additionally, total stablecoin market capitalization is approaching a record $300 billion, according to CoinGecko.

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