What happened?
Tether Holdings, the issuer of the largest dollar-pegged token USDT, is reportedly in talks to raise between $15b and $20b through a private placement. This move could value the company near $500b, putting it on par with top-tier private companies like SpaceX. The firm aims to sell about a 3% stake and intends to use the funds for new equity, not secondary sales by current backers.
Who does this affect?
The fundraising impacts a broad range of stakeholders including potential investors, existing backers, and competitors in the stablecoin market such as Circle. The future activity of Tether can also influence the regulatory landscape, as the firm has had previous encounters with US authorities. The company’s valuation and growth plans might bring more attention to the crypto business sphere as a whole.
Why does this matter?
The successful completion of this deal will have significant implications for the crypto market. Tether’s enormous valuation would underscore the growing acceptance and maturation of digital currencies. On the other hand, the move may test investor appetite for crypto champions, especially amid easing rates and potentially moderating yield on reserves, factors that could impact future earnings. Tether’s ability to draw such a substantial investment could tilt perceptions of the viability and profitability of crypto businesses.