Behind Tether's $20 billion fundraising: declining profits and valuation battles

The $20 billion funding round once explored by Tether has quietly shifted to a more realistic target after investor skepticism over its $500 billion valuation.

CEO Paolo Ardoino stated, “Even if we didn’t sell a single token, we would still be very happy.” The latest financial report shows that Tether’s profits declined by approximately 25% in 2025.

Funding Shift

Tether’s fundraising story is a market exploration rooted in grand narratives. This crypto giant, centered around issuing the USDT stablecoin, initially set an astonishing target of $15 billion to $20 billion in funding negotiations launched last year.

If successful at this valuation, Tether would leap into the ranks of the world’s most valuable private companies.

However, the market responded calmly. Facing expectations of a $500 billion valuation, potential investors generally expressed hesitation and skepticism.

Advisors had to adjust their strategy, turning to a smaller funding plan of around $5 billion. This means the funding scale was reduced to a quarter of the original target.

Valuation Controversy

Market doubts about Tether’s $500 billion valuation stem from multiple comparisons and assessments. Such a valuation would place Tether alongside top global tech companies like OpenAI, SpaceX, and ByteDance.

Tether CEO Paolo Ardoino offers his own reasoning. He compares Tether to hot but consistently unprofitable AI companies: “AI companies make as much profit as we do, just with a negative sign in front.”

In 2025, Tether achieved approximately $10 billion in profit, mainly derived from the earnings of its massive reserve assets backing USDT.

Unlike tech firms still burning cash chasing the future, Tether is a cash-flow-positive profit giant. But investors don’t seem entirely convinced by this valuation logic.

Profit Drivers

The roughly 25% profit decline in 2025 is the result of multiple intertwined factors.

The primary reason is the overall cooling of the cryptocurrency market. As traders retreat from high-risk assets, the crypto market experienced a significant downturn after the optimistic regulatory outlook following Trump’s election. As a provider of market “infrastructure,” Tether couldn’t remain unaffected.

Ardoino attributed part of the profit decline to the drop in Bitcoin prices. He also noted that the company earned between $8 billion and $10 billion from its gold holdings.

Despite the profit dip, Tether’s fundamentals remain solid. In Q4 2025, USDT’s market cap grew to $187.3 billion, and its total reserves increased to $192.9 billion.

Reserve Strategy

Tether’s asset reserve strategy increasingly resembles that of a “sovereign wealth fund.” The company has become one of the most critical links between the global financial system and the crypto world.

It is not only one of the largest buyers of U.S. Treasuries globally but also plays an increasingly important role in the gold market. By the end of 2025, Tether’s gold reserves reached 127.5 metric tons.

According to J.P. Morgan reports, by January 31, 2026, Tether’s gold reserves further increased to about 148 tons, valued at over $23 billion. This holding places it among the top 30 largest gold holders worldwide.

These figures seem to confirm Ardoino’s statement—Tether plans to allocate 10% to 15% of its portfolio into physical gold.

Market and Regulatory Challenges

Investors’ concerns are not only about valuation but also stem from long-standing regulatory and transparency issues. Since its founding in 2014, the company has faced scrutiny over whether its tokens are used for illegal activities and the transparency of its asset reserves.

Although Tether has regularly published quarterly reserve attestations through BDO Italia, it has never undergone a full independent audit. This issue has always been a lingering doubt in investors’ minds.

By the end of 2025, S&P Global downgraded Tether’s reserve rating to the lowest tier within its system, citing increasing exposure to high-volatility assets like Bitcoin and gold.

In response, Ardoino provocatively said, “We take pride in your hatred.”

Gate Platform Perspective: Trading Opportunities Amid Volatility

After the liquidation wave in October 2025, stablecoins and related asset classes have shown new trading dynamics. Despite increased market volatility, core stablecoins like USDT have demonstrated remarkable resilience.

For example, Tether’s gold-backed token XAUT, representing physical gold reserves exceeding $23 billion, attracts more attention during periods of risk aversion and value preservation.

Even during recent metal price corrections and fluctuations, XAUT contracts on the Gate platform maintained 24-hour trading volumes between $300 million and $500 million, with active trading leading among similar assets globally.

For traders, understanding Tether’s strategic adjustments and fundamental changes is crucial for capturing trading opportunities related to these assets. Market volatility presents both risks and opportunities.

Summary

As of February 10, 2026, USDT is priced at $0.999268 on Gate, maintaining a high peg to the dollar, continuing to serve as a “reserve currency” in global crypto trading.

While Tether adjusts its funding strategy, it has become the seventh-largest buyer of U.S. Treasuries, with its gold reserves surpassing those of countries like Australia and the United Arab Emirates. The company is quietly reshaping the bridge between traditional finance and the crypto world in its own unique way.