Investment giants SoftBank and Ark Invest, led by Cathie Wood, are in preliminary discussions to invest in Tether, the company behind the world's largest stablecoin USDT, according to a Bloomberg report. This development follows news of Tether's plans to raise up to $20 billion, which could value the stablecoin issuer at a staggering $500 billion.
The potential fundraising round highlights the immense growth and investor confidence in the stablecoin sector. Stablecoins, cryptocurrencies pegged to traditional assets like the U.S. dollar, are seen as a revolutionary force for faster and cheaper cross-border payments. The total market capitalization of stablecoins has surged 40% this year to $287 billion, with Citigroup analysts projecting it could reach $4 trillion in a bullish market scenario.
Tether's USDT dominates the market with a $173 billion market cap, largely backed by U.S. Treasury holdings that have generated significant profits. The company reported a substantial $4.9 billion profit in Q2 2024. The success of competitor Circle, which saw its stock price soar after going public, further underscores strong investor appetite for stablecoin-related assets.
In a strategic expansion move, Tether also announced plans to enter the U.S. market with a new dollar-pegged token, USAT, compliant with the upcoming GENIUS Act.