Tether Scales Back Ambitious Fundraise After Investor Resistance

Tether trimmed early-stage plans for a very large private financing after investor pushback over both the proposed size and the implied enterprise valuation. Advisers had floated ceilings that would have placed the company among the most highly valued private firms, but many institutional buyers hesitated and recommended a materially smaller round. Management says earlier figures were intended as upper limits, not targets, and stresses that the business generates robust cash returns, limiting the operational need for external capital. Investors cited several sticking points: the headline deal size and price, recent shifts in reserve composition toward Treasury securities and private bullion accumulation, and the fact that attestations of reserves remain narrower than full audits. Company disclosures and filings show roughly $10 billion in net profit for 2025 (about a 23% decline from 2024) even as total assets rose by around $49.17 billion year‑on‑year. Over the same period, Tether materially increased direct holdings of U.S. Treasury securities to in excess of $122 billion and issued roughly $50 billion of new USDT, moves that traders and allocators say both reduce short‑term redemption volatility and concentrate rate exposure. Separately, the firm has accelerated purchases of physical and token‑backed gold at a tempo reported at about two tonnes per week (roughly $1 billion per month), moving inventory toward the low hundreds of tonnes and routing metal to secured custody in Switzerland — a scale that raises practical questions about settlement, custody and market impact. Those reserve shifts became focal points in valuation talks: while Treasuries are highly liquid, the bullion accumulation and the mechanics of tokenized metal introduce operational and audit considerations that influence large, nine‑figure checks. Ratings firms and counterparties have flagged changes in reserve composition, complicating price discovery for outsized private placements. To address institutional concerns, Tether is advancing an onshore product, USAT, structured through Anchorage Digital Bank and tied to established custody and dealer partners — a move intended to fit within U.S. regulatory oversight and ease due diligence for banks and asset managers. The combination of strong earnings and strategic repositioning reduces the immediate cash need for a transformative capital infusion, but investor reluctance to underwrite a sky‑high private valuation signals that transparency and governance reassurances will be prerequisites for future mega‑rounds. Scaling back the target diminishes dilution and preserves insider control in the near term, yet it also highlights a trust gap with institutional allocators that Tether will need to close through clearer reporting, structural safeguards or onshore product execution. For markets and regulators, the episode underscores how a single high‑profile fundraising can surface broader concerns about reserve practices, operational robustness of tokenized assets, and the systemic links between crypto liquidity and traditional financial markets.