Tether Scales Back $500B Valuation Plans Amid Investor Pushback

Tether has dramatically reduced its private fundraising ambitions following significant investor resistance to a proposed $500 billion valuation. The stablecoin giant is now considering a round closer to $5 billion, down from initial reports of a $15 billion to $20 billion target.

According to FT, Tether has scaled back its planned $15–20bn fundraising after investor pushback over a $500bn valuation, with advisers now discussing a raise as small as $5bn. CEO Paolo Ardoino said the larger figure was only a maximum the company was willing to sell and that…

— Wu Blockchain (@WuBlockchain) February 4, 2026

CEO Paolo Ardoino addressed the discrepancy, calling the larger figures a “misconception.” He stated Tether never formally committed to that scale and would be “very happy” raising zero capital. The company reported $10 billion in profits for 2025.

However, profits declined approximately 23% from the prior year. Bitcoin price drops drove the decrease, though strong returns on gold holdings provided some offset. Tether’s USDT stablecoin currently holds a market capitalization of $185 billion.

The fundraising retreat places Tether’s financial strategy under intense scrutiny across the digital asset industry. The company remains central to global crypto liquidity and trading activity worldwide.

Investors Question Tether Valuation Amid Regulatory Concerns

Investor skepticism centered on justifying the $500 billion valuation in current market conditions. Multiple concerns surfaced during discussions with potential backers regarding the company’s fundamentals and oversight.

Regulatory scrutiny topped the list of investor worries. Questions about reserve transparency also emerged as a sticking point. Past allegations of illicit use added to the hesitation among prospective participants.

A recent S&P Global Ratings downgrade compounded these concerns. The credit agency highlighted Tether’s exposure to riskier assets, specifically Bitcoin and gold holdings within its reserves.

S&P also noted limited disclosures regarding the creditworthiness of Tether’s custodians and counterparties. These transparency gaps contributed to investor reluctance to accept the proposed valuation terms.

The pullback mirrors a broader shift across crypto finance. Investors now demand stronger fundamentals, predictable revenue streams, and regulatory clarity before committing capital to digital asset ventures.

In September 2025, Bloomberg News first reported Tether’s exploration of the massive fundraise. The company sought $15 billion to $20 billion for roughly a 3% stake at that time.

Ardoino confirmed on X that Tether was evaluating a raise from select high-profile investors. He declined to disclose further details about potential participants or specific terms.

IPO Prospects and U.S. Regulatory Pathway

The fundraising reset reshapes expectations for a potential Tether initial public offering. BitMEX co-founder Arthur Hayes and other crypto insiders had fueled speculation about a public listing.

A public offering no longer appears imminent given current circumstances. However, regulatory developments could provide a pathway toward legitimacy and a potential 2026 IPO.

Meanwhile, Tether has taken steps to strengthen its U.S. market position. In August 2025, the company appointed former White House crypto policy executive Bo Hines as a strategic adviser.

The hiring aimed to bolster expansion efforts in the United States. Crypto companies have benefited from President Donald Trump’s favorable stance on digital currencies during his administration.

Following this, Tether launched USA₮ in January 2026 under the GENIUS Act framework. The federally regulated stablecoin targets the American market specifically.

🚨 JUST IN: TETHER LAUNCHES U.S. GENIUS ACT–COMPLIANT $USAT STABLECOIN. pic.twitter.com/NKfpx4CXVX

— Coinwaft (@coinwaft) January 27, 2026

Anchorage Digital Bank serves as the token’s issuer. The institution holds the distinction of being America’s first federally regulated stablecoin issuer.

Cantor Fitzgerald has been named the designated reserve custodian and preferred primary dealer. The financial services firm will ensure secure asset management and provide reserve visibility from launch.

U.S.-regulated exchanges and banking partners are being lined up to support broad access. The goal is to integrate USA₮ across the American financial ecosystem.

These regulatory tailwinds, including U.S. stablecoin legislation, could improve market conditions. If circumstances align favorably, Tether may revisit IPO plans for 2026.

The El Salvador-based company continues dominating the stablecoin market globally. USDT remains the preferred tool for minimizing price volatility and enabling seamless transactions between digital assets.