Tether Slashes $20B Funding Goal After Investors Reject $500B Valuation

Tether has retreated from an ambitious plan to raise up to $20 billion, slashing its target to approximately $5 billion after investors balked at a proposed valuation that would have priced the stablecoin issuer at roughly $500 billion.

The reversal, first reported by the Financial Times, highlights a rare moment of friction for the crypto juggernaut. Despite generating over $10 billion in profit last year and holding $141 billion in U.S. Treasuries, Tether faced institutional resistance to a valuation that would have placed it alongside tech titans like SpaceX and ByteDance.

The Valuation Disconnect

Advisers are now floating a reduced raise of ~$5 billion. The core friction point wasn’t Tether’s solvency. USDT remains the market leader with a $187 billion capitalization, but the risk-adjusted price tag. Prospective backers reportedly flagged regulatory uncertainty and the opacity of Tether’s non-Treasury reserves (specifically Bitcoin and gold) as reasons to reject the half-trillion-dollar appraisal.

CEO Paolo Ardoino attempted to reframe the narrative, claiming the $20 billion figure was never a hard target.

“That number is not our goal. It’s our maximum we were ready to sell,” Ardoino stated, adding that existing shareholders were reluctant to dilute their equity.

Institutional Context

This funding retreat follows a rigorous stress test of Tether’s reputation in traditional finance circles. Late last year, S&P Global downgraded its assessment of Tether’s reserves to “weak,” explicitly citing the company’s increasing exposure to volatile assets like Bitcoin and gold rather than pure cash equivalents.

For the market, the signal is clear: while Tether is a cash-printing machine, institutional capital demands a discount for regulatory tail risk. The stablecoin itself ignored the corporate drama, with USDT holding its peg firmly at $0.999 on $114 billion in 24-hour volume.