Crypto firm Tether on track for $500 billion valuation
Tether Holdings SA, the company behind the world’s biggest stablecoin, is in discussions with investors to secure up to $20 billion in funding, a move that could place the crypto firm among the world’s most valuable private companies.
The El Salvador-based firm is looking to raise $15 billion to $20 billion by selling about a 3% stake in a private placement, according to two sources familiar with the discussions, Bloomberg revealed.
Another source involved in the process warned that the $20 billion figure represents the upper end of expectations and that the final amount could be considerably lower. The talks are still in the early stages, and the specifics of the proposed investment may change, the sources said, speaking on condition of anonymity.
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Depending on the size of the stake sold, the deal could value Tether at roughly $500 billion, putting it on par with companies like OpenAI and Elon Musk’s SpaceX. Such a valuation would be remarkable for a lightly regulated crypto firm, especially as competition grows and declining U.S. interest rates threaten potential earnings. By comparison, its closest publicly traded competitor, Circle Internet Group Inc., was valued at around $30 billion as of Tuesday afternoon.
The deal would consist of newly issued shares rather than existing investors selling their holdings, the sources said. Cantor Fitzgerald is serving as the lead advisor, they added.
Fitzgerald, which is said to own about 5% of Tether, if Tether reaches a $500 billion valuation, that stake would be valued at roughly $25 billion, as per a LinkedIn post.
Bloomberg reports that investors looking to participate in Tether’s latest funding round have been granted access to the company’s internal data. The report also says the deal could close by the end of the year, depending on the agreed-upon terms.
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Tether’s USDT stablecoin has been the most widely used digital dollar in crypto. With a market value of $173.08 billion, it is the third-largest cryptocurrency overall and the top stablecoin by a wide margin. Adoption of USDT is growing, with a New York-based stablecoin network focused on Tether raising millions to expand its use in international trade.
Recently, automakers in Bolivia said they would start accepting USDT for payments.
The company is also planning a return to the U.S. market with a fully regulated stablecoin, USAT, taking advantage of the new stablecoin rules introduced under the GENIUS Act.
USAT is designed for U.S. businesses and institutions, positioning it to compete with Ripple’s RLUSD and other stablecoins targeting the American market. Tether has had a rocky history with U.S. regulators. In 2021, it paid a $41 million fine over issues with reserve disclosures and largely stayed out of the U.S. market until recently.
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