Tether is Pursuing a $500 Billion Valuation With $20 Billion Private Funding Round

The issuer of the USDT (the largest stablecoin in the world), Tether Holdings SA is officially negotiating a private funding round of up to $20 billion with investors. Tether’s CEO, Paolo Ardoino, has confirmed that the deal will push the valuation of the crypto giant up to $500 billion.

Tether Eyes $500 Billion Valuation With Private Funding Round

The stablecoin issuer, Tether Holdings, is reportedly seeking to raise $15-20 billion that will send the valuation of the company to $500 billion. According to the reports, the raise will be done through a private placement and will give investors 3% of the El Salvador-based company.

In a tweet, Tether’s chief exec, Paolo Ardoino, confirmed the reports. He wrote that the stable company is considering a private raise that will involve a group of high-profile investors. 

Ardoino explained that the aim of the funding round is to maximize the scale of Tether’s strategy across all existing and new business lines, which include stablecoins, AI, commodity trading, energy, communications, and media.

People close to the matter have noted that negotiations are still at an early stage and the final figure may be less than what had been preliminarily outlined. The deal will involve new equity being traded instead of current investors selling their stake.

Sources claim that Cantor Fitzgerald, which had acquired 5% of the issuer’s securities, will serve as the lead adviser for the potential transaction. If Tether reaches a valuation of $500 billion, it will be in the league with OpenAI and Elon Musk’s SpaceX, an extraordinary milestone for a crypto company.

USDT’s Dominance Fuels Tether’s Growth

Tether’s USDT is already the biggest stablecoin in the market with a market cap of over $171.4 billion. This means Tether now holds more than 56% of the global stablecoin market cap. Its closest rival, Circle’s USDC, has a market cap of $73.9 billion, according to data from CoinMarketCap. 

While USDT is significantly bigger than USDC, its growth rate is more striking. Year over year, the market cap of Circle’s USDC has increased by $37.9 billion, while that of Tether’s USDT has increased by $53.83 billion.

The dominance of the stablecoin market has made Tether Holdings one of the most profitable companies on a per-employee basis. The Q2 report shows that Tether recorded $4.9 billion in net profit, bringing its year-to-date profit total to $5.7 billion.

USDT Could Extend Its Stablecoin Dominance With Potential IPO

The recent reports about the $500 billion valuation of Tether there are talks about a potential initial public offering (IPO) for the company. Circle recently went public, and many analysts believe Tether Holdings will do the same. 

BitMEX co-founder and former CEO Arthur Hayes is one of the leading figures behind the Tether IPO calls. Hayes said on X after the reports of the Tether funding round that an IPO in the US could spell doom for Circle.

Overall, the fact that Tether is closing on a valuation of $500 billion is a commendation of how the business has done exceptionally well in terms of growth and profitability. While the deal is still in its infancy, it shows how much crypto companies have grown over the years.