Global stablecoin leader Tether's ambitious $500 billion valuation target has met with investor resistance, prompting a significant downward revision of its fundraising expectations. Originally targeting a capital raise of $15 to $20 billion, Tether's advisors are now considering scaling back the amount to a minimum of $5 billion, highlighting market skepticism over its sky-high valuation.

According to a report, Tether's CEO Paolo Ardoino downplayed the fundraising scale in an interview, describing the initial $15 to $20 billion target as a "misunderstanding." He stated, "That figure is not our target, but the maximum amount we are prepared to sell. We would be perfectly happy if we didn't sell a single share." This statement contrasts sharply with the company's ambitious financing plan initiated last year.

Investors have expressed concern over the $500 billion valuation, which would place Tether among top private companies like OpenAI, Anthropic, SpaceX, and ByteDance. Although Tether reported approximately $10 billion in profit last year, its 2025 profit saw a 23% year-on-year decline, testing its profitability.

The cryptocurrency market has experienced a significant downturn over the past six months, with traders retreating from speculative assets, further dampening investor interest in high-valuation crypto projects.

The valuation dispute has become the primary obstacle to fundraising. According to informed sources, Tether's advisors encountered clear resistance after engaging with potential investors. The $500 billion valuation target sparked widespread skepticism, with investors privately expressing concerns about the pricing.

Paolo Ardoino defended the high valuation by comparing Tether to loss-making artificial intelligence companies. "AI companies make as much profit as we do, just with a minus sign in front," he said. "If you believe an AI company is worth $800 billion with a huge minus sign in front, that's your prerogative."

Tether claims it generated about $10 billion in profit last year, primarily from returns on investments backing the value of USDT. The company manages USDT, a $185 billion dollar-pegged stablecoin that serves as a reserve currency in the digital asset market. However, with 2025 profits falling by approximately one-quarter year-on-year, Ardoino attributed the decline to falling Bitcoin prices.

Informed sources cautioned that negotiations are ongoing and financing terms could still change. Investor sentiment might shift if the broader cryptocurrency market begins to rebound.

Regulatory risks are causing hesitation among investors. Some potential investors are reportedly concerned about the regulatory challenges facing Tether. Since its founding in 2014, the crypto group has faced scrutiny over concerns about the token's use for illegal activities, as well as questions regarding the transparency and quality of its asset reserves.

In recent years, Tether has released quarterly attestations of its reserves from accounting firm BDO Italia, but has not undergone a full audit. Ardoino mentioned that the company has shown potential investors "deep" tools used for collaboration with various law enforcement agencies.

S&P Global Ratings downgraded Tether's reserve rating to its weakest level late last year, citing increasing exposure to high-risk assets like Bitcoin and gold. Ardoino responded at the time, "We proudly accept your disdain."

New US stablecoin legislation signed by former President Trump, coupled with US competitor Circle's public offering last year, has provided momentum for Tether. The company recently launched a new, regulation-compliant token in the US. Nevertheless, regulatory uncertainty remains a major concern for investors.

Tether's profit structure is highly dependent on crypto market performance and reserve asset investments. The 23% year-on-year decline in 2025 profit to $10 billion directly reflects the downturn in the cryptocurrency market.

Ardoino revealed that the company gained approximately $8 to $10 billion from its gold holdings, benefiting from rising precious metal prices. USDT's accelerated growth since 2020 has made Tether one of the world's largest buyers of US Treasury bonds and, in recent months, a significant player in the gold market.

These large-scale purchases have positioned Tether as one of the most critical links between the global financial system and the volatile world of cryptocurrencies. The company is controlled by a small circle of long-term executives, and insiders' reluctance to sell shares is partly why the exact amount of equity to be sold remains undetermined.

Tether's efforts to attract prominent investors are seen as a barometer of interest in the cryptocurrency industry. The move is viewed as an attempt to consolidate Tether's credibility and network, despite the company's substantial profits and minimal need for additional capital. Digital assets received a boost following Trump's election due to promises of a more regulation-friendly environment in the US, but the market has declined significantly over the past six months.