Tether Targets $20B Raise at $500B Valuation, Expansion Beyond Crypto Planned

• Tether explores $20B raise at $500B valuation, aiming to expand its influence.
• Expansion includes AI, media, energy, and plans for a US-regulated stablecoin.
• Talks are preliminary, with valuation and deal size dependent on investor demand.

Tether Holdings is in talks with investors to raise $20 billion through a private placement offering approximately 3% of the company. The potential deal could value the world’s largest stablecoin issuer at around $500 billion, placing it among the most valuable private companies globally alongside OpenAI and Elon Musk’s SpaceX.

The El Salvador-based company seeks between $15 billion and $20 billion in new equity rather than existing investor stake sales, with Cantor Fitzgerald serving as lead adviser. However, sources familiar with the matter caution that these figures represent top-end targets and actual amounts could be lower as negotiations continue.

Expansion Plans Target Multiple Business Sectors

CEO Paolo Ardoino confirmed the company is evaluating investment from high-profile investors to maximize strategy across existing and new business lines. The expansion includes stablecoins, artificial intelligence, commodity trading, energy, communications, and media sectors, indicating Tether’s ambition to diversify beyond cryptocurrency services.

The fundraising occurs as Tether prepares to capitalize on President Trump’s pro-cryptocurrency policies by returning to US markets. The company recently unveiled plans for a US-regulated stablecoin and appointed Bo Hines, a former White House crypto official, to lead these efforts.

Ardoino has claimed Tether operates with 99% profit margins, though these figures are not subject to the same reporting standards required of publicly traded companies. This lack of transparency raises questions about the accuracy of such claims and the company’s actual financial performance.

Related: Bolivia’s Auto Dealers Turn to Tether (USDT) as Dollar Reserves Hit Crisis Point

Tether’s Fundraising Coincides With Business Model Challenges

The potential $500 billion valuation contrasts sharply with publicly traded rival Circle Internet Group, which maintained approximately $30 billion market capitalization as of Tuesday. This valuation gap highlights the premium private markets may assign to Tether’s market position and growth potential.

Tether’s fundraising timeline coincides with challenges to its business model. This includes increased competition from rival stablecoins and potential margin pressure from declining US interest rates that could reduce earnings from reserve investments.

The early-stage nature of these discussions means deal terms and final investment amounts remain subject to change based on investor interest and market conditions. Success would provide Tether with capital to execute its diversification strategy while potentially validating its ambitious valuation expectations.