Tether has reduced its funding target from $20 billion to $5 billion due to investor doubts about the $500 billion valuation.

Tether’s financing target has been cut from $20 billion to $5 billion, and its $500 billion valuation has been shot down by Wall Street, revealing the true situation of this stablecoin giant’s “pricing power.”
(Background: Tether releases open-source Bitcoin mining system MiningOS, free of backdoors and third-party dependencies)
(Additional context: Tether is a gold super buyer! In Q4 2025, they increased gold holdings by 27 tons, ranking among the top 30 gold holders worldwide)

Table of Contents

• The Reality of the $500 Billion Valuation
• CEO: We are a Profitable AI Company
• Declining Financial Profits and Asset Moats
• If Not Short of Money, Why Still Raise Funds?

To start with the conclusion, this is not about Tether lacking funds; it’s a “pricing power” issue. Rumors that Tether’s financing goal was cut from $20 billion to $5 billion acknowledge that Wall Street recognizes Tether as a super printing machine, but refuse to admit it could be the next Nvidia.

Even with control over one of the world’s most vital US bond liquidity streams, in the eyes of seasoned capitalists, Tether remains a “spread-earning” bank.

The Reality of the $500 Billion Valuation

According to the latest news from the Financial Times on the 4th, Tether’s financing target has shrunk from the originally announced $15-20 billion to $5 billion. The market’s previously rumored $500 billion valuation now appears more like a tentative asking price.

Tether’s core business is essentially “stablecoin issuer” combined with “high-tech money market fund” plus new ventures in gold and AI sectors. The profitability of this business heavily depends on US Treasury yields, falling within the realm of traditional finance, where market P/E ratios for such businesses are usually no more than 10 to 15 times. To reach a valuation of $500 billion would require investors to see Tether as a rapidly growing AI company. That explains why Wall Street institutional investors are hesitating at the negotiation table.

CEO: We Are a Profitable AI Company

Tether CEO Paolo Ardoino responded very famously to this situation. Regarding the reduced financing target, he denied it was a “downgrade” and redefined the current hype around AI valuations. In an interview, Paolo said:

An AI company generates the same amount of profit as us, just with a negative sign (loss).

This statement is full of sarcasm towards Silicon Valley but also exposes Tether’s anxiety. Paolo Ardoino tries to tell the market not to see them as just a stablecoin bank; they have money and are transforming into an AI computing giant through investments in companies like Northern Data. He emphasized that their internal cash flow is ample, and even major shareholders are “holding back” on selling shares.

Declining Profits and Asset Moats

Shifting focus to the numbers, according to Tether’s 2025 data, the company earned about $10 billion in net profit. This figure is impressive, even surpassing many Wall Street investment banks, but compared to $13 billion in 2024, profits have declined by about 25%.

Why did issuance hit a record high of $186.5 billion while profits shrank? The reason is the compression of costs and spread margins. To stay compliant, such as launching USAT in accordance with the GENIUS Act and establishing global fiat channels, Tether’s hidden costs are rising, which is why they are eager to prove they are more than just a stablecoin company.

However, those who have examined their balance sheet must admit the company’s strong financial position. First, their status as a US bond whale: holding $141 billion in US Treasuries, making them a significant creditor to the US government. This is the so-called Cantillon Effect—those closest to the printing press benefit first.

Second, their high-liquidity assets for hedging: holding $17.4 billion in gold and $8.4 billion in Bitcoin. This shows Tether is using native assets to hedge against fiat currency risks.

If Not Short of Money, Why Still Raise Funds?

If they are not short of money, earning $10 billion annually, why go out and sell equity? The answer is simple: to buy insurance from Old Money.

In the second year of Trump’s presidency, although the crypto regulatory environment seemed to loosen, the pushback from traditional banks was just beginning. Tether doesn’t need that $5 billion in cash; it needs the shareholders behind that $5 billion—those Wall Street giants who can speak in Washington. By tying equity to traditional capital, Tether’s true purpose of fundraising is to bring in traditional capital.

Whether they can reach a $500 billion valuation is just a matter of negotiation tactics changing hands.