According to Daniel Vosley, co-founder of OneBalance, the encryption money software company, Tether is engaged in a negotiation to raise $20 billion from investors, which will bring its valuation as a producer of stable currency to an alarming $500 billion. If successful, the financing would “reset the expectations of a stable currency sector as a whole”.
According to Vosley, “a $500 billion valuation is not only well above the standards of the past but even exceeds the GDP of El Salvador, the home country of Tether's headquarters”. The potential deal highlighted the growing role of the digital dollar in global finance and placed Tether at the same level of valuation as giants such as OpenAI and SpaceX, far ahead of the competitor Circe (valued at $36 billion).
Tether's USDT currency flows exceeded $172 billion, and is a long way ahead of the USDC (74 billion) of Circle. Other competitors, such as Paxos and Ethena, are also attracting the attention of investors, but no one is as large as Tether.
In addition, Tether plans to launch at the end of the year a new, stable USAT for the United States market, led by former White House official Bo Heins. By investing its reserves in United States Treasury debt, the company earned a sizeable profit of $4.9 billion in the second quarter alone, with a profit margin of 99 per cent. As the stable currency market continues to break new milestones, this unexpected fortune has made competitors eager to catch up.
These profits have decreased since the Federal Reserve fell interest rates in September. Tether's timing choice is crucial, given the additional interest rate reductions that will be available later this year and early next year. “The key question is whether this represents ensuring that capital is driven by the end of the cycle before a further decline in interest rates, or whether there is a real confidence that demand for a stable currency will accelerate in the context of a more United States-encrypted-currency policy”.