Tether scales back fundraising ambitions amid investor scrutiny
Tether, the issuer of the world’s largest stablecoin, is reassessing the scale of a long-anticipated fundraising round as investor resistance mounts over a proposed $500 billion valuation. While the crypto group initially explored raising as much as $15 billion to $20 billion, its leadership is now signaling a far more cautious approach.
Paolo Ardoino, Tether’s chief executive, sought to downplay expectations around the capital raise, describing the higher figure as a misunderstanding rather than a firm objective. “That number is not our goal. It’s our maximum we were ready to sell,” he said. “If we were selling zero, we would be very happy as well.”
Investors question valuation as talks continue
Registered in El Salvador, Tether controls USDT, a dollar-pegged stablecoin with a circulating supply of about $185 billion that underpins much of the global crypto trading ecosystem. The company began discussions last year to bring in external capital, a move widely interpreted as an attempt to bolster credibility and attract institutional backing, FT reports.
However, advisers involved in the talks have since floated a significantly smaller raise—potentially as little as $5 billion—after encountering skepticism from prospective investors, according to people familiar with the matter. Concerns center on whether Tether’s $500 billion valuation is justified, a figure that would place it alongside some of the world’s most valuable private companies, including SpaceX, ByteDance and leading artificial intelligence firms.
Ardoino defended the valuation by pointing to Tether’s profitability. The company has said it generated roughly $10 billion in profit last year, largely from interest earned on the assets backing USDT. “The AI companies are making the same amount of profits we’re making, except with a minus sign in the front,” he said. “If you believe that some AI company is worth $800bn, with a huge minus in front, be my guest.”
Regulation, reserves and market volatility
Tether’s fundraising efforts come against a complex backdrop of regulatory scrutiny and market volatility. Although digital assets initially rallied on expectations of more favorable U.S. regulation following Donald Trump’s election, crypto prices have fallen sharply over the past six months.
The company has faced long-running questions about the transparency and risk profile of its reserves. While Tether publishes quarterly attestations from BDO Italia, it has not completed a full audit. S&P Global Ratings downgraded Tether’s reserves last year due to increased exposure to higher-risk assets such as Bitcoin and gold, a move Ardoino dismissed at the time, saying: “We wear your loathing with pride.”
Despite a roughly 25% decline in profits in 2025, which Ardoino attributed to falling bitcoin prices, he said gains of $8 billion to $10 billion from gold holdings helped offset the downturn.
People close to the discussions cautioned that fundraising terms remain fluid and could shift quickly if sentiment across crypto markets improves.
Read also: Bitwise adds staking business through Chorus One acquisition
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