Tether, the company behind the USDT stablecoin, has reportedly adjusted its external capital fundraising ambitions, now aiming for $5 billion after initial discussions for $15 billion to $20 billion, tied to a $500 billion valuation target, met with investor caution. This represents a significant reduction from the earlier high-end target. CEO Paolo Ardoino clarified that the $20 billion figure was a maximum and that the company is "extremely profitable," having little need for additional capital, with insiders reluctant to sell shares.
Despite its profitability, with reported net profits of over $10 billion in 2025, concerns persist among potential investors regarding regulatory and operational risks. A TRM Labs report indicated that approximately 1.63% of USDT transaction volume in 2023, totaling $19.3 billion, was linked to illicit activity. The company holds $193 billion in total assets supporting $186 billion in USDT, resulting in $6.3 billion in excess reserves, and its $122 billion in U.S. Treasurys make it one of the largest private holders of government debt globally.
Tether is strategically expanding its operations beyond stablecoin issuance. It is building what some describe as a "shadow bank" for Bitcoin, evidenced by its $2.1 billion credit facility for Strike's volatility-proof Bitcoin loans and its co-design of the loan structure. A proposed merger would integrate Strike, Twenty One Capital (a major corporate Bitcoin holder), and miner Elektron Energy into a Tether-linked platform covering various banking functions, including deposits, lending, payments, custody, and treasury operations. The company also holds $8.7 billion in gold bars and is in talks to invest in gold miners, having acquired a nearly 38% stake in Elemental Altus Royalties Corp. This broad strategy, including the recent launch of its federally regulated USAT stablecoin, aims to expand its dollar network and diversify its reserves, positioning Tether closer to a sovereign wealth fund. Additionally, stablecoins like USDT are increasingly being channeled into the $2 trillion private credit market, with platforms tokenizing funds to allow smaller investors access to institutional strategies previously only available to large institutions, though this comes with heightened risks as exemplified by the Goldfinch failure.
