SS #72 - Tether Slashes Fundraising Target as Investors Reject Massive Valuation

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Good morning!

Tether is back in the spotlight this week with reports that the stablecoin giant is scaling back its massive fundraising ambitions. After initially floating a $20B target, the company has reportedly lowered that figure to $5B following significant pushback from institutional investors. The friction largely stems from an eye-watering $500B valuation target a number that would have put Tether in the same league as SpaceX. However, prospective backers were hesitant to sign off on that price tag, citing ongoing regulatory concerns and a desire for greater transparency.

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In Today's Edition:

• Headline: Tether Slashes Fundraising Target as Investors Reject Massive Valuation

• Quick Bites: Tether Buys $150M Stake in Gold.com

• Yield of the Week: 9.6% APY on Perena

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HEADLINE

State of play: Tether has reportedly slashed its fundraising target from a projected $20B to $5B after institutional investors balked at an ambitious $500B valuation.

• Early discussions of a $500B valuation which would have placed Tether alongside giants like SpaceX, faced significant pushback from investors citing regulatory risks.

• Advisers have now floated a much smaller $5B raise, though CEO Paolo Ardoino maintains that any fundraising is optional given the firm’s massive profitability.

• Despite the cooling interest, Tether reported approximately $10B in profit for 2025 and remains a dominant force with over $185B in USDT in circulation.

What’s Next: Tether will likely shift its focus from a massive equity sale to strategic partnerships that emphasize its new federally regulated USAT stablecoin. If institutional demand for equity remains cool at the $5B level, expect the firm to lean on its $6.3B in excess reserves to self-fund its global expansion into AI, energy, and gold infrastructure.

Why it Matters: This is a reality check for crypto-native valuations. Despite reporting $10B in profit for 2025 and owning more U.S. Treasuries than most nations, Tether still faces a steep "regulatory premium." The pushback proves that even record-breaking cash flow cannot fully offset the perceived risks of Tether’s offshore structure in the eyes of traditional Wall Street.

Our Take: Tether doesn't need the cash; it needs the "seal of approval." By pivoting to a smaller raise, they are attempting to buy institutional protection rather than capital. For the community, the opportunity lies in Tether’s aggressive diversification as they move into gold (via Gold.com) and regulated U.S. rails, they are becoming "too big to fail" regardless of what VC valuation they carry.

QUICK BITES

• Fidelity's stablecoin FIDD goes live.

• Tether buys $150M stake in Gold.com.

• Spanish lender BBVA joins EU banks' stablecoin venture.

• Aave Labs sunsets Avara 'umbrella brand' and Family wallet.

• Upbit partner KBank files stablecoin wallet trademarks ahead of IPO.

• Tether floats $5B raise after investor pushback on $500B valuation target.

• Y Combinator opens stablecoin funding option for startups starting Spring 2026.

• Tether launches open-source Bitcoin mining OS to challenge proprietary software.

• S&P projects 1,600x upper-bound increase in euro stablecoin issuance to $1.3T by 2030.

• House launches probe into $500 Million UAE deal linked to World Liberty Financial.

• Polymarket to swap bridged USDC.e on Polygon for native USDC via Circle partnership.

• Tether deepens ties with Anchorage Digital through $100M equity investment at $4.2B valuation.

YIELD OF THE WEEK

Perenea USD*: 9.6% APY

• Perena is a Solana-based protocol that provides USD*, a digital dollar backed by a mix of stablecoins and hedged market positions.

• The asset generates yield through a combination of delta-neutral trading strategies and on-chain lending markets.

• To manage risk, the protocol spreads collateral across multiple centralized and decentralized platforms rather than relying on a single source.

Hyperwave HLP: 11.48% APY

• Hyperwave introduces hwHLP, a liquid primitive that brings yield from Hypercore into the HyperEVM ecosystem by tokenizing HLP deposits.

• The protocol uses the Boring Vault architecture—a standard securing over $3.5B in assets and has undergone multiple audits by firms including Spearbit and ThreeSigma.

• While the vault structure natively uses management fees, Hyperwave dynamically adjusts these rates to mirror a 10% performance fee on realized gains.

Midas mRe7YIELD: 14.53% APY

• mRe7YIELD is a tokenized strategy designed to capture market-neutral DeFi yields across various blockchain networks.

• The vault’s underlying risk and strategy deployment are managed and monitored by Re7 Labs.

• Earnings are automatically reinvested into the token price, allowing the asset's value to compound over time.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.