When Tether Becomes More Valuable Than ByteDance: Who Is Paying for the Crypto World's "Money Printer"?

In recent years, stablecoins have become the core infrastructure of the global crypto financial system, and their largest issuer, Tether, is currently sparking widespread discussion due to a rumor— the company is reportedly seeking a financing valuation of around $500 billion, surpassing OpenAI and ByteDance, and ranking among the world's most valuable unlisted companies. This valuation has triggered controversy between capital markets and the crypto industry: Tether's extraordinary profits from high-yield assets indeed demonstrate astonishing profitability, but its business model is highly correlated with macro interest rate environments, regulatory trends, asset transparency, and market structure. This article analyzes the realistic support and potential concerns behind this valuation from five perspectives: revenue, asset structure, market share, regulatory risk, and horizontal valuation comparison.

Revenue and Profit

As the issuer of the USDT stablecoin, Tether has achieved astonishing profitability in recent years thanks to interest income. With global interest rates rising, Tether has invested large amounts of user-swapped USD reserves into low-risk assets such as US Treasuries, thereby obtaining high interest returns. According to reports, Tether achieved about $13.4 billion in profit in 2024, mainly from the interest income on its large holdings of US Treasuries. This scale of profit not only far exceeds most crypto industry companies but is also outstanding even among internet technology companies.

In comparison, OpenAI's valuation soared to $80–90 billion in 2023–2024, but its revenue scale is still small, mainly relying on licensing and subscriptions for its AI models, and it is still in the investment phase with limited profitability (its valuation has now risen to $300 billion and may reach $500 billion, which reflects more of a bet on future growth). ByteDance's valuation is in the $250–300 billion range, with company profits in 2023 reportedly around $40 billion, and its business spans short video, advertising, e-commerce, and other fields, supporting its hundreds of billions of dollars valuation with massive revenue and profit. Circle, as the issuer of the USDC stablecoin, plans to IPO in 2024 at a valuation of only about $9–10 billion, with 2024 revenue of about $1.68 billion and net profit of only $156 million, which is not comparable to Tether.

From a profitability perspective, Tether's current profits far exceed those of OpenAI and Circle, and are close to or even surpass some traditional tech giants, but its business model is also highly dependent on external factors: interest rate levels and stablecoin demand. Tether does not pay interest to users and has almost no other major sources of income, which means that the current considerable interest income is cyclical. Once global interest rates fall back to low levels, Tether's interest income will shrink significantly, and its profitability may no longer be at current levels. In addition, the growth space and trading volume of the stablecoin market will also affect Tether's revenue. In contrast, the valuations of OpenAI and ByteDance are more based on long-term growth expectations brought by technological innovation or user scale, while Tether's high valuation requires investors to believe that its current profit level is sustainable or even continues to grow. Therefore, from the perspective of revenue and profit alone, giving Tether a $500 billion valuation is somewhat aggressive and requires consideration of profit sustainability.

Asset Structure

To assess whether Tether's valuation is reasonable, its asset-liability structure and risk status must be examined. According to Tether's regularly disclosed reserve reports, its reserve assets are mainly high-liquidity, low-risk assets. As of the end of 2023, Tether claimed that nearly 90% of its reserves consisted of cash and cash equivalents, including short-term US Treasuries, overnight and term repurchase agreements, money market funds, etc. Tether has long since completely eliminated risk assets such as commercial paper and instead holds a large amount of high-rated securities. Specifically, analysis indicates that Tether holds over $100 billion in US Treasuries, about 82,000 bitcoins (worth about $5.5 billion), and 48 tons of gold reserves to increase asset diversity. At the same time, Tether has also engaged in some external lending and other investments, but as of the end of 2023, its approximately $5.4 billion in excess reserves was sufficient to cover all such lending risk exposures. In other words, even after deducting these risk assets, Tether's assets still fully cover its liabilities, with a considerable buffer margin.

Higher reserve transparency also boosts market confidence. Tether currently issues audit-level attestation reports every quarter through independent accountants (such as BDO), disclosing asset composition and reserve balances. This level of transparency was lacking in the past—Tether was once widely questioned for insufficient disclosure and was fined by regulators in 2021 for misleading statements. However, recent reports show that Tether's reserve quality has significantly improved and has withstood real-world demand tests: under normal circumstances, Tether is capable of meeting large-scale user redemptions, and its large holdings of US Treasuries and repo agreements can be quickly liquidated. Statistics show that during the crypto market downturn in 2022, Tether successfully processed up to $21 billion in redemption demand while maintaining solvency.

Of course, Tether is not without asset structure risks. First, although Tether's holdings of bitcoin and gold have brought the company some returns (the price increases of these assets have contributed considerable unrealized profits to Tether), they are risk assets, and in extreme cases, value fluctuations may affect Tether's net asset value. Second, although Tether's transparency has improved, it has not yet undergone a full public audit, and external trust in its reserves is mainly based on attestation reports and company reputation, which is still different from the strict regulatory audits faced by publicly listed companies. Third, Tether's assets are highly concentrated in US Treasuries, which means that on one hand, it benefits from the US government's credit endorsement, but on the other hand, it is also linked to traditional financial market trends and US debt conditions. If the US Treasury market experiences severe volatility or liquidity tightens, Tether's assets will also come under pressure. It is worth noting that US Treasury officials recently stated that, due to the government's need to issue large amounts of bonds to raise funds, major stablecoin issuers have become important buyers of US debt. In a sense, Tether has become integrated into the traditional financial system, which is a sign of strength but also means its fate is partly tied to it.

Overall, Tether's asset-liability situation is currently relatively stable, with a sufficient safety cushion. This provides a certain foundation for a high valuation—after all, a huge market cap must be supported by real assets. However, we should also see that its asset allocation strategy and transparency need to be continuously maintained or even improved to support long-term market confidence in its high valuation.

Competitive Position and Market Share

Tether's leading position in the stablecoin market is undisputed. USDT currently occupies the largest share of the stablecoin market. As of Q3 2025, USDT's market cap accounts for about 59% of all USD stablecoins, still firmly in first place. According to the latest data, USDT's circulation has reached about $172 billion, while the second-ranked USDC (issued by Circle) has a market cap of about $74 billion, less than half of USDT. USDT has a huge user base, reportedly close to 500 million users worldwide. In crypto exchanges, cross-border remittances, and OTC trading, USDT has long played the role of "digital dollar" and is the foundation of crypto market liquidity.

However, Tether's leading position is also being challenged and eroded by competitors. USDC, its main rival, has always emphasized compliance and transparency. After experiencing a banking crisis in 2023 (with some reserve bank deposits impaired), USDC's market cap once declined but recovered in 2024–2025. According to Circle, after the US clarified the regulatory framework for stablecoins (such as the "Genius Act"), institutional demand for USDC increased significantly. In Q2 2025, USDC's circulation grew 90% year-on-year, and in Q3, over $12.3 billion in new funds flowed in, with market share rebounding to about 25%. This shows that in a clear regulatory environment and with increased participation from traditional finance, compliant stablecoins have a late-mover advantage.

In addition, emerging stablecoin projects are constantly appearing, further dividing market share. FDUSD (First Digital USD) is a stablecoin headquartered in Hong Kong, emphasizing regulatory compliance and transparency, and is gradually rising in the Asian market, especially benefiting from Hong Kong's friendly policies. USDe is an interesting new entrant— a synthetic dollar stablecoin launched by Ethena Labs. It is not directly backed by fiat deposits but maintains a 1:1 peg through crypto assets and derivatives hedging mechanisms. Notably, USDe's scale surged in a short period: in just Q3, its market cap increased by about $9 billion, making it the third largest stablecoin with about 5% market share. In addition, between 2023–2025, some special-purpose or institution-issued stablecoins appeared, such as PayPal's PYUSD (with the payment giant entering to connect crypto payments), and MakerDAO's new stablecoin (possibly an upgraded version of the decentralized stablecoin DAI), both reportedly reaching over $1 billion in circulation in a short time.

Changes in the market landscape mean that although Tether is large, it cannot rest easy. USDT faces several concerns in stablecoin competition:

In terms of product substitution and innovation, if a stablecoin can significantly surpass USDT in trust and convenience (for example, fully compliant and globally usable, or more decentralized and censorship-resistant in technology), USDT's leading position may be shaken. The strong comeback of USDC and the sudden rise of USDe both show that there are gaps in the market that can be filled.

Regarding policy impact, if major countries/regions prefer to use local compliant stablecoins (such as the US possibly promoting institutional use of regulated USDC or bank-issued stablecoins), Tether's space in compliant markets will be compressed. For example, BUSD (Binance USD) was once the third largest stablecoin, but because its issuer Paxos was ordered by New York regulators to stop new issuance, BUSD quickly shrank and delisted in 2023— a typical case of policy risk impacting market structure.

In addition, USDT also faces competition in multiple scenarios within the same track. Stablecoins circulate not only on exchanges but also in cross-border trade, DeFi lending, and other fields, where different stablecoins may have their own advantages. If Tether fails to expand into new scenarios in time, other stablecoin projects that better understand local needs or have stronger technology will take market share.

Nevertheless, Tether has its own moat. First, USDT has the strongest network effect, the widest trading pairs, and the best liquidity, making it very difficult for new coins to completely replace USDT's role. Second, Tether's brand recognition and user habits built over the years globally (especially in emerging Asia-Pacific markets and crypto trading) will not easily disappear. Tether is also actively deploying, such as promoting multi-chain issuance and connecting with payment channels in various countries to consolidate its market position. Overall, on the competitive front, a $500 billion valuation for Tether implies that the market believes it can continue to dominate the stablecoin ecosystem and withstand competitive shocks. If its market share is significantly diluted or growth stagnates in the future, this valuation logic will also be shaken.

Regulatory and Compliance Risks

A key factor affecting Tether's valuation is the regulatory environment. In the past, Tether has been questioned and even penalized multiple times for transparency and compliance issues. In 2021, Tether reached settlements with the New York Attorney General's Office and the Commodity Futures Trading Commission (CFTC) for making misleading statements about its reserve asset composition, and was fined tens of millions of dollars. Regulatory investigations found that Tether did not always maintain 100% reserve coverage in its early days, raising concerns about its solvency. Although Tether has since improved its information disclosure, it has never fully dispelled external doubts—some critics believe that only a full audit can prove the true reliability of Tether's reserves, but Tether has not conducted a thorough audit, citing complex company structure and inability to disclose sensitive information.

As a global financial center, US regulatory trends for stablecoins will directly affect Tether's operational prospects. In recent years, US regulators have taken an indirect approach to Tether, such as cutting off its banking channels and investigating partners, since Tether's main entity is not based in the US. However, as stablecoin usage expands, the US is attempting to directly legislate to regulate stablecoin issuance. Between 2023–2024, the US Congress repeatedly discussed the "Stablecoin Regulation Act," requiring any institution issuing payment stablecoins to US users to have registration or banking licenses. In mid-2025, the US passed the "Genius Act," clarifying the legal status and regulatory requirements of stablecoins as payment tools. This favorable development has attracted more institutional funds to compliant stablecoin companies such as Circle. For Tether, this is both an opportunity and a challenge: the opportunity is that with clear regulation, if it can become a compliant operator, it can conduct business more openly; the challenge is that Tether must comply with new regulations to participate in the US market. Tether is not sitting idly by. In September 2025, Tether announced plans to issue a new US dollar stablecoin "USA₮" regulated by the US, and hired the former White House crypto chief as the head of its subsidiary. This shows that Tether intends to spin off an entity that complies with US regulations to meet regulatory requirements. If this plan goes smoothly, Tether may be able to meet US market compliance requirements without giving up its core business. However, in the eyes of regulators, Tether's past compliance record and offshore background may still be a concern, and even with a new license, whether it can gain the full trust of US authorities and mainstream financial institutions remains to be seen.

Outside the US, the EU has passed the MiCA regulation (Markets in Crypto-Assets Regulation), which also sets capital, liquidity, and reporting requirements for stablecoin issuers. MiCA will gradually take effect in 2024–2025, and unregistered stablecoins will not be able to circulate legally in the EU. If Tether wants to remain unaffected in the European market, it may need to set up subsidiaries in the EU and accept regulation, which will increase compliance costs and transparency requirements. In Asia, Hong Kong, Singapore, and other places are also formulating their own stablecoin regulatory guidelines. For example, the Hong Kong Monetary Authority plans to require stablecoin issuers to be licensed in Hong Kong and meet reserve management standards. Some countries and regions, including mainland China, strictly restrict domestic residents from using overseas stablecoins, limiting Tether's growth potential in certain markets.

Due to Tether's widespread global use, law enforcement agencies in various countries are paying more attention to it. For example, the US Department of Justice has reportedly investigated whether Tether is involved in bank fraud, money laundering, etc. If any major judicial charges or lawsuits emerge in the future, they will directly shake market confidence in USDT. In addition, stablecoins have already been drawn into geopolitical games: the US may, in order to maintain the effectiveness of financial sanctions, crack down on stablecoin issuers that do not cooperate in freezing illicit funds. In contrast, Circle and others will cooperate in freezing assets on sanctioned addresses, while Tether has historically been more restrained in this regard (although it has also frozen certain illegal addresses). This difference may lead to policy preferences: regulators are more supportive of controllable stablecoins and are wary of offshore entities like Tether.

Stablecoins have become a systemically critical node in the crypto market, and if a leading company encounters problems, it could trigger a chain reaction across the entire market. Therefore, regulators are particularly concerned about whether Tether could pose systemic risk. Many financial officials repeatedly emphasize that stablecoins need strict regulation to prevent runs and shocks. In this atmosphere, if Tether wants to achieve a $500 billion valuation, it must convince investors that it will not easily collapse due to regulatory crackdowns or a crisis of confidence. On one hand, Tether has proactively improved its compliance image in recent years, such as cooperating with judicial authorities to freeze USDT funds involved in crime and collaborating with law enforcement in various countries. On the other hand, its parent company iFinex's past involvement in the Bitfinex exchange hack and its history of maneuvering with the banking system are still frequently mentioned. These factors may all be discounted in valuation discussions.

In summary, regulatory and compliance risk is the biggest variable hanging over Tether. Compared to other high-valuation companies, Tether is in an industry with far more regulatory unknowns: OpenAI mainly faces competition and ethical risks, ByteDance faces geopolitical scrutiny, while Tether faces the possibility that financial regulation could directly determine its survival. When evaluating a $500 billion valuation, this must be appropriately discounted. Otherwise, valuing solely based on current profit multiples while ignoring the possibility of regulatory black swan events would be a disregard for risk.

Horizontal Valuation Comparison

Comparing Tether's potential valuation with several benchmark companies helps analyze whether the $500 billion figure is reasonable:

OpenAI, as a unicorn in the field of artificial intelligence, completed a $30 billion financing round led by SoftBank and others in March 2025. Subsequently, according to Reuters and other media, the company is negotiating an employee secondary equity sale, which could push the valuation to about $500 billion. OpenAI's valuation is based on expectations of its future disruptive technology. Although its 2024 revenue is expected to be only in the billions of dollars, capital markets have given it a very high multiple because of its leading position in general AI and potential network effects. In contrast, Tether's technological barriers and innovation imagination are limited, and its main business model is relatively traditional (earning interest spreads). If only looking at revenue/profit multiples, OpenAI's current valuation far exceeds Tether's (OpenAI's profit is almost zero but its valuation is hundreds of billions), but that is a bet on future growth. Tether's $500 billion valuation seems to mean that the market believes its existing business is already very mature and stable, which is a different expectation from OpenAI's high-growth logic.

ByteDance is one of the world's largest unicorns by revenue, with a valuation range of about $250–300 billion in 2023–2024 (the latest internal employee transaction valuation is about $330 billion). Its valuation is supported by a huge user ecosystem (TikTok, Douyin, etc.) and considerable profitability. Reportedly, its net profit in 2023 was about $40 billion, and 2024 revenue is expected to exceed $150 billion. Even so, due to political risks such as US bans, ByteDance's valuation multiple is not high; $330 billion is only about 8 times its annual profit, and less than one-fifth of the market cap of a listed peer like Meta. In comparison, if Tether is worth $500 billion, with its 2024 profit of about $1.3 billion, the P/E ratio is over 37 times—this multiple is already close to or exceeds many fast-growing tech companies. Considering that Tether's business growth rate is not as fast as internet companies (the annual growth rate of stablecoin demand is far lower than social media user growth), such a high multiple seems to lack traditional justification. More importantly, ByteDance's case shows that even if a company's performance is outstanding, regulatory and political risks still lead investors to apply a lower risk premium. Similarly, Tether's regulatory uncertainty should lower its valuation expectations, rather than reflect a "zero risk" or "policy dividend" scenario as some optimistic forecasts do.

Circle (USDC), as Tether's most direct comparable company, sought a public listing in 2024, with a market valuation of about $9–10 billion, far lower than Tether. This is because Circle's business scale is much smaller: its total revenue in 2024 is only $1.68 billion, with net profit in the tens of millions; USDC's market cap is also less than half of USDT's. Of course, Circle adopts a highly compliant development model, and its long-term growth potential and profit model differ from Tether's. For example, in addition to interest income, Circle also has blockchain payment business, cross-border settlement, and other service income. At present, the market recognizes Tether's intuitive ability to capture profits through interest spreads more, while somewhat ignoring the costs Circle pays for compliance (sharing interest with banking partners, reserve custody fees, etc.). But if compliance becomes the decisive factor in the stablecoin industry in the future, Circle's valuation potential may actually be higher, as it has almost no regulatory obstacles. In contrast, if Tether cannot overcome compliance challenges, even if its current valuation is high, it may shrink with policy changes.

Placing Tether in a broader company valuation context, $500 billion is almost comparable to the world's largest private companies: for example, Elon Musk's SpaceX was valued at about $400 billion in mid-2025; it is even close to the market cap levels of listed tech giants such as Alibaba and Tencent. This means that if the market really gives Tether such a valuation, it is equivalent to believing that its status in the global business world is on par with these companies that possess cutting-edge technology or massive user platforms. Many analysts are skeptical of this—after all, stablecoin issuance is essentially more like a financial service or quasi-banking business, rather than an internet/AI business with high technological barriers and explosive expansion potential. Even in the traditional financial sector, the highest-valued institutions rarely reach $500 billion. Therefore, from a financial industry perspective, Tether's valuation has already exceeded that of most banks and financial services companies.

Based on the above horizontal comparison, one can ask: what justifies Tether being seen as on par with OpenAI and surpassing ByteDance?

As mentioned earlier, Tether is currently highly profitable, and if the market believes that this profitability is not only sustainable but can also further increase with the growth of stablecoin usage, then giving it a tech giant-like valuation multiple may make sense. With $13.4 billion in annual profit, a $500 billion valuation implies a P/E ratio of about 37 times, which, although higher than traditional banks, is not uncommon for some growth tech companies. If Tether can steadily expand USDT issuance each year and enter more fields (such as payment settlement, securities tokenization, etc.), its profitability may have ample room for growth, thus absorbing the high valuation.

Stablecoins have long been an indispensable infrastructure for the crypto market and some cross-border transactions, and Tether holds a monopolistic dominant position in this space. In a sense, USDT is the "reserve currency" of the digital asset world. This status itself has enormous strategic value, similar to Visa's position in traditional payments. If investors see USDT as one of the core pillars of the future digital financial system, then it is understandable to give it a relatively high valuation. In addition, Tether executives have hinted that this round of financing will be used to expand into new business lines such as artificial intelligence, commodity trading, energy, communications, and media. If Tether successfully leverages its capital and influence in the crypto space to diversify, then the imagination space will indeed be greater than just stablecoin issuance.

It should be noted that the strongest doubts about the $500 billion valuation are due to the neglect of risk factors. Optimistic valuations often assume everything goes smoothly, but the reality is that Tether's potential risks are much higher than those of ordinary tech companies. As mentioned above, regulatory crackdowns, interest rate shifts, competitive erosion, and credit events—any one of these could have a major impact on Tether. ByteDance's valuation discount case clearly shows that the market considers risk and lowers valuations accordingly. Therefore, a more prudent valuation method should discount Tether's fundamental profitability to cover possible risk losses. If a more conservative multiple is used, such as a 15–20 times P/E ratio, Tether's corresponding market cap would be about $200–270 billion. This may be closer to its "reasonable valuation range."

Conclusion

Considering revenue, assets, competition, regulation, and other factors, Tether's pursuit of $500 billion in financing valuation is an event that has attracted much attention and controversy. This valuation certainly reflects the market's recognition of Tether as the stablecoin leader and amazement at its recent huge profits, but from a rational perspective, we need to remain cautious:

On one hand, Tether's current financial performance is excellent, with profit levels surpassing many world-class companies, and its stablecoin plays the role of base currency in the crypto economy, with a certain monopoly. These factors provide a foundation for a high valuation. Looking ahead to the next few years, if the crypto market continues to expand and stablecoins are more widely adopted, Tether's business scale and profitability may further improve. In addition, Tether's active strategy of diversification (such as entering AI and energy fields) could, if successful, give the company new growth momentum. Therefore, from an optimistic perspective, $500 billion represents a possible valuation for Tether to become a "digital financial giant" in the future.

On the other hand, potential risks and uncertainties make this valuation appear aggressive. Tether's profitability is extremely sensitive to the macro interest rate environment, and the current interest bonanza cannot last forever. Once external conditions change, Tether's profitability may be greatly reduced. The bigger concern is regulatory constraints—as detailed above, major economies are tightening regulation of stablecoins, and whether Tether can successfully cross the compliance threshold directly determines its future survival and development space. The $500 billion valuation implies an assumption that Tether will smoothly resolve regulatory risks, but this is by no means a foregone conclusion in reality.

Overall, Tether's pursuit of a sky-high valuation surpassing OpenAI and ByteDance is a bold test of the capital market's outlook for leading companies in the crypto field. It reflects both market confidence and enthusiasm, as well as differences in investor risk appetite. When assessing whether this valuation is reasonable, we should maintain a rational balance: recognize Tether's current strong performance and strategic ambitions, but also not ignore the special risks of its industry. Whether the $500 billion valuation is reasonable ultimately depends on whether Tether can prove that its profit model is robust and reliable in the long term and successfully resolve external risks affecting its business. Only then can the high valuation move from skepticism to self-fulfillment; otherwise, market enthusiasm may quickly fade, and the high valuation will be unsustainable.