On February 4, 2026, advisers for Tether, the issuer of the world’s largest stablecoin USDT, proposed a $5 billion capital raise, a sharp reduction from earlier discussions of $15–20 billion tied to a $500 billion valuation, per the Financial Times. This adjustment follows investor skepticism over Tether’s high valuation target, despite reporting $10 billion in net profit for 2025, down 23% from $13 billion in 2024, per BDO attestation. Tether CEO Paolo Ardoino described initial figures as a “misconception,” emphasizing the company’s profitability and limited need for external capital, FT.
USDT maintains a commanding $186 billion circulating supply, dwarfing Circle’s USDC at $70 billion, backed by $193 billion in assets, including $122 billion in U.S. Treasurys, per The Block data. However, concerns over reserve quality with S&P Global downgrading ratings due to Bitcoin and gold exposure and 1.63% of 2023 transaction volume ($19.3 billion) linked to illicit activity, per TRM Labs, have fueled caution. The GENIUS Act, signed by President Trump, bolsters stablecoin frameworks, aiding Tether’s new USAT launch under Bo Hines, per. Ardoino highlighted compliance tools for law enforcement.
The scaled-back raise signals tempered expectations, with Tether holding $6.3 billion in excess reserves, per. Investors balked at the $500 billion target, viewing it as aggressive amid regulatory risks and operational transparency issues, per Bloomberg. Tether’s dominance in cross-border payments and DeFi remains unchallenged, but competition from USDC and potential yuan-backed stablecoins looms, per Reuters. Bitcoin ($113,234) and Ethereum ($4,070) show stability, but stablecoin scrutiny could impact sentiment, per CoinMarketCap.
Tether’s $5 billion raise, if successful, could fund expansion without dilution, per. Ongoing talks may shift with market rallies, per FT. Investors should monitor USDT reserves on Tether. to and SEC updates on sec.gov. Diversify into BTC or ETH with stop-losses below $112,000 and $4,000, or hold USDC for stability, per TradingView. Follow @TheBlock__ on X for updates. Tether’s profitability and USAT launch position it strongly, but transparency improvements are key for sustained growth in 2026.
