Tether, the issuer of the world’s largest stablecoin, is trading on secondary markets in a range of $350 billion to $375 billion, according to industry sources. Though this is below the $500 billion maximum target the company was seeking for its fundraise first reported by Bloomberg in September, the amount is still large enough to catapult its top executives into the top ranks among world billionaires.
Tether did not respond to Forbes’ request for comment by press time. SoftBank and Ark Invest have previously been mentioned as potential participants in Tether’s fundraise, but a source familiar with the matter told Forbes that SoftBank is not an investor in Tether. ETF manager Ark Invest, founded by Cathie Wood, did not respond to a request for comment.
Earlier reports suggested the El Salvador-based crypto juggernaut was initially seeking up to $20 billion for roughly 3% of the business, but its advisers later floated raising as little as $5 billion after encountering investor hesitation, according to the Financial Times.
For now, based on conversations with crypto investors and executives, Forbes is valuing Tether at roughly $200 billion—still far above the $50 billion estimate assigned to the company one year ago. That valuation would also create a windfall for Cantor Fitzgerald, putting its 5% stake at $10 billion, up from a reported $600 million in 2023.
At $200 billion, Giancarlo Devasini—Tether’s CFO and largest shareholder, believed to own between 44-45% of the company—would be worth roughly $89 billion. CEO Paolo Ardoino and former chief executive Jean-Louis van der Velde, estimated to hold 19% each, would end up with $38 billion fortunes. General counsel Stuart Hoegner, with an estimated 12% stake, would be worth close to $25 billion.
At a $350 billion valuation, the lower estimate suggested by the secondary market sales, Devasini’s stake alone would be worth more than $156 billion, enough to put him among the world’s top 10 richest people, above Warren Buffett, who was worth $147.8 billion as of Thursday.
Tether says it generated roughly $10 billion in profit (unaudited) last year, largely from the yield on reserves backing USDT, which has a market capitalization of $184 billion. The vast majority of USDT reserves, more than 80%, are reportedly backed by U.S. Treasury Bills and other short-term securities. But with demand for USDT surging and no requirement to pay holders an investment return, the company has been expanding beyond stablecoins.
Last year, CEO Paolo Ardoino said Tether was building its own artificial intelligence platform, alongside new data, energy and education divisions. It has also built sizable positions in commodities and crypto—about $23 billion in gold and $6.4 billion in bitcoin. Separately, Tether’s venture portfolio spans more than 120 companies and is worth over $10 billion, including a recent $200 million investment in internet marketplace Whop.com and a $775 million bet on video platform Rumble in 2024. Ardoino has also claimed his company has a 99% profit margin with a staff of about 300 employees.
So Tether’s latest fundraising push isn’t about needing cash, but more likely about raising its institutional credibility and clout, particularly as it tries to deepen its U.S. footprint. Last month, the company announced a U.S.-compliant stablecoin, USAT, with San Francisco’s Anchorage Digital Bank acting as issuer. Bo Hines, formerly executive director of the White House Crypto Council, was appointed CEO of Tether’s U.S. unit in September.
But Tether is facing increasing competition in stablecoins. Besides Circle with its popular USDC stablecoin, Stripe and crypto venture firm Paradigm recently unveiled a new blockchain for stablecoin payments called Tempo, with partners that include UBS, Deutsche Bank, OpenAI and Anthropic. Meta, which spent years pursuing its own stablecoin project, Libra, is also plotting a return. CoinDesk reported its plans to support stablecoin-backed payments and implement a new wallet later this year.
Regulatory pressure is building, too. On Wednesday, the Office of the Comptroller of the Currency issued a notice of proposed rulemaking to implement the stablecoin-focused GENIUS Act, signed into law in July, which would give the agency oversight of foreign payment stablecoin issuers such as Tether.
Read the full article here
