Tether scales back $20B fundraising amid valuation pushback: report

Tether is pulling back from its plans to raise $20 billion as it faces opposition from investors regarding its valuation, reported Financial Times.

The stablecoin issuer, which sits at the core of global digital asset trading, has been sounding out backers for fresh capital over the past year.

What began as discussions around a very large raise has since shifted toward a more cautious approach, highlighting the gap between Tether’s internal confidence and investor unease over pricing, regulation, and risk.

Registered in El Salvador, Tether entered talks last year about raising between $15 billion and $20 billion in new funding.

That range would have implied a valuation of roughly $500 billion, placing the company among the most valuable private groups in the world.

The sources cited in the report said advisers are now exploring a raise closer to $5 billion, after encountering reluctance from potential investors unwilling to endorse such a high benchmark.

A rethink on capital needs

Tether’s leadership has played down the significance of earlier figures, arguing that the larger sum represented a maximum rather than a target.

The company has not committed to selling a fixed stake and has indicated it could proceed with a much smaller raise or none at all.

This stance reflects its financial position.

Tether has reported about $10 billion in profit last year, largely generated from interest earned on the assets backing its USDT stablecoin.

That profitability reduces the urgency for external capital.

Insiders are also said to be cautious about selling shares, further limiting the size of any deal.

The fundraising talks were partly intended to bring in high-profile investors and reinforce Tether’s standing.

Valuation under scrutiny

Investor hesitation has centred on the proposed valuation.

At around $500 billion, Tether would sit alongside leading private technology groups such as OpenAI, Anthropic, SpaceX, and ByteDance.

Some investors have privately questioned whether those comparisons hold, despite Tether’s earnings strength.

The debate has been sharpened by broader market conditions.

Digital assets initially rallied in 2025 on expectations of more supportive US regulation following Donald Trump’s election.

Since then, crypto markets have retreated as traders moved away from speculative assets.

That pullback has made investors more sensitive to pricing and less inclined to back large private deals at peak valuations.

Regulation and transparency concerns

Regulation has added another layer of complexity. Tether has pointed to recent US legislation governing stablecoins, signed by Trump, as a positive shift for the sector.

The company has also launched a new US-compliant token, signalling an effort to align more closely with American rules.

Circle’s public listing last year has been cited as further evidence of growing acceptance for regulated stablecoin issuers.

Even so, some potential backers remain wary.

Since its launch in 2014, Tether has faced repeated scrutiny over the transparency and quality of its reserves, as well as concerns about illicit activity linked to USDT usage.

The company publishes quarterly reserve attestations from BDO Italia but has not produced a full audit.

Late last year, S&P Global Ratings downgraded Tether’s reserves to its weakest assessment, citing increased exposure to higher-risk assets such as bitcoin and gold.

Profits and market influence

USDT’s rapid expansion since 2020 has reshaped parts of global finance.

Tether has become one of the largest buyers of US Treasuries and, more recently, a significant player in the gold market.

That scale has made it a key link between traditional financial markets and the cryptocurrency ecosystem.

Tether’s profits declined by about a quarter in 2025 compared with the previous year, a drop attributed to falling bitcoin prices.

Gains of roughly $8 billion to $10 billion from gold holdings helped cushion the impact following a strong rally in the metal.

Fundraising discussions remain ongoing, and people close to the talks caution that terms could still change.

A renewed rally in crypto markets could soften investor resistance. For now, valuation remains the central obstacle.

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