Tether Considers $20 Billion Fundraising Round

TLDR

Table of Contents

Tether explores a $20 billion private placement at a $500 billion valuation.
The firm posted $5.7 billion in profit year-to-date in 2023.
USDt remains the leading stablecoin with a $172.8 billion market cap.
Circle’s market debut boosted its value to nearly $33 billion.

Tether Holdings, the issuer behind the largest dollar-backed stablecoin, is reportedly exploring a fundraising round of up to $20 billion. If successful, this move could value the company at around $500 billion, positioning it among the most valuable private companies globally. The company is considering offering a 3% stake in exchange for the funds, with Cantor Fitzgerald acting as the lead adviser for the transaction.

Private Placement in Early Stages

According to Bloomberg sources, Tether is still in the early stages of discussions. The fundraising could potentially range from $15 billion to $20 billion, though one source warned that the final amount might be lower.

This private placement aims to secure a substantial amount of capital, which would further solidify Tether’s market dominance in the stablecoin space. However, the outcome remains uncertain, as negotiations are ongoing.

Tether’s Profitability and Market Dominance

Despite its relatively low profile outside the crypto sector, Tether has quietly become one of the most profitable companies globally on a per-employee basis. In the second quarter, Tether posted a profit of $4.9 billion, bringing its year-to-date total to $5.7 billion. This strong financial performance is underpinned by the growing adoption of stablecoins as a cost-efficient and effective method of transferring money, expanding financial access, and facilitating blockchain-based applications.

Tether’s USDt remains the leading dollar-backed stablecoin with a market capitalization of $172.8 billion, accounting for about 56% of the $307.2 billion stablecoin market. This significant share reinforces Tether’s position as a key player in the crypto economy.

Global Stablecoin Adoption and Regulatory Developments

Meanwhile, the stablecoin sector continues to experience global growth. Stablecoins provide a low-cost, efficient method of transferring value and integrating into blockchain ecosystems. Notably, in the U.S., the recently passed GENIUS stablecoin bill is expected to create clearer regulations for stablecoin issuers, thus maintaining the dollar’s dominance in the space.

Tether is not the only company eyeing significant valuations. Earlier this year, Circle Internet Group, the issuer of USDC, went public. Circle’s market debut was highly successful, with its valuation climbing from $18 billion to nearly $33 billion. The stablecoin industry’s expansion and the increasing institutional interest in this market make Tether’s fundraising efforts part of a broader trend in the sector.

Stay Ahead of the Market with Benzinga Pro!

Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders: