Tether has scaled back its ambitious fundraising plans after venture capital investors questioned a valuation that would place the stablecoin issuer among the world’s most elite technology firms.
Initial discussions that once targeted a capital raise of up to $20bn have reportedly been reduced to a significantly smaller round, or potentially no raise at all, as the market signals a clear resistance to the proposed pricing.
According to a Financial Times report on 4 Feb, advisers have discussed raising as little as $5bn at an implied valuation of approximately $500bn. Chief executive Paolo Ardoino has sought to downplay the shift, suggesting the higher figure was merely a maximum and that the firm remains highly profitable without the urgent need for external capital.
The artificial intelligence comparison
Ardoino has justified the $500bn valuation by benchmarking Tether against the current darlings of the artificial intelligence sector. He pointed to the firm's $10bn profit in 2025, largely generated from the interest on the assets backing its USDT token. This earnings profile, he argued, warrants a comparison with private AI groups that command massive valuations despite operating at a significant loss.
At the discussed levels, Tether’s implied valuation would rival that of OpenAI and exceed the market capitalization of established publicly listed crypto firms such as Coinbase, which currently sits at roughly $50bn. While Tether's balance sheet scale is undeniable, critics suggest that a business model based on harvesting yield from US Treasuries does not deserve the same growth multiple as a foundational technology breakthrough.
Gold reserves and the US pivot
The fundraising reset occurs as Tether aggressively diversifies its reserves to mitigate jurisdictional and market risks. The company has become a formidable buyer of gold, amassing a stash that rivals the central banks of several sovereign nations. This bullion accumulation provided a significant earnings buffer as crypto market activity softened during the transition into 2026.
Simultaneously, Tether is attempting to formalise its relationship with the US regulatory system to ensure long-term survival. The firm recently launched USA₮, a dollar-pegged stablecoin issued through a regulated domestic entity designed to comply with the GENIUS Act. This onshoring strategy is a calculated move to position the firm as a private distributor of digital dollars at a time when traditional banking rails face increasing scrutiny.
Whether Tether can successfully rebrand from an offshore crypto utility into a systemically important technology giant remains the primary point of contention for potential investors. For now, the market remains wary of paying AI-style prices for what remains, at its core, a highly profitable digital vault.
