While Tether (USDT 0.03%) is not currently publicly traded, the company has an estimated valuation of $515 billion, which would rank it among the top 20 most valuable companies in the United States, just ahead of Mastercard.
Thanks to its massive holdings of more than $120 billion in T-bills, Tether now has the attention of the U.S. Treasury Department. And, increasingly, the company is also on the radar of investors, who are looking for ways to profit from the buzz around stablecoins. Here's what you need to know.
Why is everyone talking about Tether right now?
Tether, the largest stablecoin issuer in the world, has been around since 2014, but it is only in the past year that Wall Street investors have really started to sit up and take notice. That's because Tether has rapidly transformed its stablecoin (also called Tether) into an incredibly profitable business.
At the beginning of this year, Cathie Wood of Ark Invest dedicated an entire section of her firm's "Big Ideas 2025" report to stablecoins, showcasing how big they have become, and how profitable Tether has become in the process. Wood revealed that Tether made more than $13 billion in profit last year, and it did so with fewer than 200 employees. In fact, only four companies in the S&P Financial Services Select Sector Index made more money than Tether in the first half of 2024. On a per-employee basis, Tether is arguably the most profitable business in the world.
NYSE: CRCL
Key Data Points
In June, the second-largest stablecoin issuer in the world, Circle Internet Group, went public in a splashy IPO. That got people talking about potential valuations for stablecoin issuers, and that's what eventually led to the $515 billion valuation estimate for Tether.
Adding even more fuel to the stablecoin fire, the Trump administration has been talking up the role of stablecoins in the U.S. economy. Passage of the GENIUS Act earlier this summer was a key event, because it helps to outline the rules of the road for stablecoins. At the same time, Treasury Secretary Scott Bessent has been promoting stablecoins as a way to make America the "crypto capital of the world" and a "crypto superpower."
Tether's "Pro-America" strategy
All of this is fantastic, but there's just one minor problem: Tether is not a U.S.-based company. Instead, it's based in El Salvador. So, in part to counteract the notion that Tether is a stablecoin primarily popular in emerging markets, the company has embraced what some have called a "Pro-America" strategy.
Image source: Getty Images.
The company is now sitting on billions of dollars, and must figure out a way to either spend or invest this money. Earlier this year, Tether said it had already invested $5 billion over the past two years in a wide mix of U.S. businesses, including blockchain and crypto infrastructure companies. And it has created a separate Tether VC unit to find new opportunities in other tech sectors.
And here's where things get really interesting -- Tether is also investing in U.S.-based artificial intelligence and brain-computer interface companies. It has also become a significant investor in Rumble, helping it to launch a new Bitcoin strategy. And, most recently, Tether became a lead investor in Twenty One Capital, a newly formed Bitcoin treasury company that now ranks as the third-largest corporate holder of Bitcoin in the world.
But what about stablecoins?
While the breadth and depth of Tether's U.S. investments is certainly impressive, it has no immediate plans to get involved in offering stablecoin payment products to Americans. As Tether CEO Paolo Ardoino points out, it's simply too competitive right now in the U.S. when it comes to payments.
Why would American consumers use stablecoins for payments, if they can simply use debit cards, credit cards, or cash? In a recent CNBC interview, Ardoino characterized the U.S. stablecoin payments business as "a race to the bottom."
It's a different story entirely in emerging markets, where people invest in stablecoins primarily as a way to hedge against hyperinflation. In many cases, they would rather hold "digital dollars" than their home country's currency. Moreover, the size of the unbanked population is much higher in emerging markets. Tether gives these unbanked individuals access to financial services that are taken for granted in the U.S. market.
That being said, Bloomberg recently suggested that Tether might get more involved in the U.S. stablecoin market. Most likely, the focus will be on large institutional investors, which can use stablecoins for cross-border transactions and instant settlement.
How can you invest in Tether?
Tether is privately held, so you are not able to invest in the company directly. Moreover, Tether says it has no plans for an IPO anytime soon.
You could, however, buy the Tether stablecoin on a cryptocurrency exchange. But just remember -- the Tether stablecoin will always trade for $1, so you will need to search out decentralized finance (DeFi) yield strategies to make any money whatsoever on your investment.
A better strategy might be investing in businesses that are part of Tether's "Pro-America" growth strategy. As Tether grows in size, new investment opportunities will likely emerge, in areas ranging from Bitcoin to AI.
If Tether decides to focus on its "Pro-America" strategy, it's easy to see how many of its plans for the future will dovetail with those of the Trump administration. That means the "crypto superpower" investment thesis that was in vogue earlier this year might actually have legs after all.
