Tether High Valuation Stablecoin Empire

Interest rate dividends drive profits

Tether, leveraging its massive USD reserves to invest in short-term US Treasury bonds and repurchase agreements, is expected to earn huge interest income in a high-interest-rate environment, with net profits estimated to reach $13.4 billion in 2024, far surpassing competitors like OpenAI and Circle. This model is highly dependent on macro interest rates and stablecoin demand, and a decline in interest rates could compress the interest margin, putting the profitability myth to a cyclical test.

Stable allocation of reserve assets

About 90% of the reserves are in cash equivalents, including money market funds, with an additional holding of 82,000 bitcoins and 48 tons of gold to provide a liquidity buffer. Third-party verification reports show strong stress resistance, but the volatility of bitcoin and the concentration risk in U.S. Treasury bonds still exist, and the overall audit transparency needs to be strengthened to maintain market confidence.

Market dominance and competitive landscape

In Q3 2025, USDT’s market share is expected to be 58-64%, with circulation exceeding $170 billion, far ahead of USDC at only 25% or about $71 billion. The emerging USDe’s market value has surged to $9 billion, challenging the landscape. Tether’s liquidity network and global brand advantages are significant, but compliance trends and the rise of regional stablecoins threaten its monopoly position.

Valuation Reasonability Doubt

A financing valuation of 500 billion USD surpasses most tech giants, and it must prove the sustainability of its business in a low-interest, high-regulation environment. Currently, profits rely on external interest rate benefits rather than the core business model, and continuously enhancing transparency and strengthening compliance layout are essential to support grand ambitions.

Summary

The profitability of Tether is beyond doubt, and it has indeed established an unshakeable position in the stablecoin market. To support a valuation of 500 billion dollars, its business model needs to prove that it can remain robust under low interest rates and high regulatory environments.