Valuation of $500 Billion Dream Cools: Tether Slashes Fundraising Target by 75%

Original Title: Tether retreats from $20bn funding ambitions after investor pushback

Original Author: Jill R Shah, Financial Times

Original Compilation: Peggy, BlockBeats

Editor's Note: Against the backdrop of an overall cooling crypto market and pressured valuation narratives, Tether finds itself in a delicate position. On one hand, the continuous expansion of USDT's scale has made it an unignorable 'new financial player' in the US Treasury and gold markets. On the other hand, the high $500 billion valuation expectation, the yet-to-be-completed comprehensive audit, and the long-standing regulatory and compliance controversies still keep potential investors cautious.

Tether's next move may reflect not only its own choices but also the realistic boundaries the entire stablecoin industry is facing.

The following is the original text:

Tether CEO Paolo Ardoino stated: "These AI companies make about as much money as we do, just with a minus sign in front."

As investors expressed doubts about its $500 billion valuation target, the CEO of the world's largest stablecoin issuer, Tether, proactively lowered external expectations and attention regarding its fundraising scale.

This crypto group, registered in El Salvador, initiated fundraising talks last year, planning to raise $15 to $20 billion. If the deal were completed, it would place the company among the world's most valuable private companies.

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

Tether CEO Paolo Ardoino downplayed the potential fundraising scale, stating that the previously mentioned $15 to $20 billion target was "a misunderstanding."

"That number is not our target; it's just the maximum we are willing to sell," he said in an interview. "We would be perfectly happy selling zero."

Ardoino stated that Tether is highly profitable and has received "a lot of interest" at the $500 billion valuation level. He added that the company has not yet decided how much equity to sell, partly because insiders are reluctant to reduce their holdings.

The company's US dollar-pegged stablecoin, USDT, currently has a scale of approximately $1.85 trillion and is considered the "reserve currency" of the digital asset market. Control of Tether is concentrated in the hands of a small group of long-tenured executives.

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

Following Trump's election as president, the market was once boosted by expectations of a more friendly US regulatory environment for digital asset prices. However, over the past six months, as traders retreated from high-risk speculative assets, the crypto market has seen a significant pullback.

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

Ardoino stated that Tether—which disclosed approximately $10 billion in profit last year, primarily from returns on assets backing the value of USDT—deserves a valuation comparable to these still-loss-making AI model companies.

"These AI companies make about as much money as we do, just with a minus sign in front," he said. "If you want to believe that an AI company with a huge minus sign in front is worth $800 billion, that's your freedom."

Both Tether and its fundraising advisor Cantor Fitzgerald declined to comment on the scale of this funding round. This investment bank is run by the children of US Commerce Secretary Howard Lutnick and also holds shares in Tether.

Informed sources cautioned that the negotiations are still ongoing, and the financing terms could still change; investor sentiment could also reverse if the overall crypto market regains strength.

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

Ardoino stated that the new US stablecoin legislation signed into law by Trump, as well as the listing of its US-based competitor Circle last year, have further increased market attention and momentum for Tether. Tether recently also launched a new token in the US that complies with this regulatory framework.

However, informed sources said some potential investors remain cautious about the regulatory risks surrounding Tether. Since its founding in 2014, this crypto group has long faced scrutiny, with controversies mainly focusing on whether its tokens are used for illegal activities and the transparency and quality of its asset reserves.

In recent years, Tether has begun publishing quarterly reserve attestations by the accounting firm BDO Italia but has still not undergone a full independent audit.

Ardoino stated that the company has demonstrated to potential investors the depth of its technical tools for collaboration with law enforcement agencies in multiple countries to prove its capabilities in compliance and law enforcement cooperation.

S&P Global Ratings downgraded Tether's reserve rating to the lowest tier in its system at the end of last year, citing its increasing exposure to high-risk assets like Bitcoin and gold. In response, Ardoino said at the time: "We wear your disdain as a badge of honor."

Since 2020, USDT's growth has significantly accelerated, making Tether one of the world's largest buyers of US Treasuries and, in recent months, a major player in the gold market.

Asset allocation on such a large scale makes Tether one of the most critical connecting nodes between the global financial system and the highly volatile cryptocurrency world.

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

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