Tether's Potential $515 Billion Valuation Surpasses Costco Coca-Cola

Tether, the issuer of the USDT stablecoin, has been a cornerstone of the cryptocurrency ecosystem, facilitating trading, remittances, and serving as a stable store of value. The company's recent financial performance and market position have sparked discussions about its potential valuation if it were to go public. According to an analysis by Artemis CEO Jon Ma, Tether could reach a market valuation of $515 billion, surpassing well-known corporations like Costco and Coca-Cola.

Ma's analysis draws parallels between Tether and Circle, the issuer of USDC, which recently went public with a market cap of $30 billion. Ma's financial model projects Circle to reach $410 billion in EBITDA for 2025, equating to a 69.3x EBITDA multiple. Tether reported $13 billion in net profits for 2024, with $7 billion from Treasuries and repos and $5 billion from unrealized gains on Bitcoin and gold holdings. These gains were not included in EBITDA calculations, leading Tether CEO Paolo Ardoino to describe the valuation as "a bit bearish considering our current (and increasing) Bitcoin + Gold treasury."

Ardoino acknowledged the $515 billion valuation as a "beautiful number" and expressed humility about the valuation. Comments from Bitcoin advocates and entrepreneurs Jack Mallers and Anthony Pompliano suggested the valuation should be at least $1 trillion. The calculation assumes Tether will increase its USDT supply by $50–$60 billion in 2025, resulting in an average supply of $170 billion. With an average Federal Funds Rate of 4.2%, this would imply a projected 2025 EBITDA of approximately $7.4 billion. By applying Circle’s current 69.3x EBITDA multiple to Tether’s projected EBITDA, the analysis reaches $515 billion.

Jon Ma notes that using Circle’s current EBITDA multiple is a strong assumption and may not be sustainable, highlighting the speculative nature of the calculation. Tether's stablecoins are used by millions of individuals and institutions worldwide, facilitating efficient cross-border transactions and serving as a bridge between traditional finance and the crypto market. The company has also invested in technology and sustainable energy initiatives, further integrating itself into the global economy.

While the $515 billion valuation is a theoretical exercise based on current market multiples, it underscores Tether’s significant influence in the crypto and traditional finance sectors. However, whether Tether becomes one of crypto’s next IPO success stories remains uncertain. Tether's leadership, under Ardoino, has emphasized transparency and security in its operations, with profits primarily derived from interest earned on reserve assets and gains from Bitcoin and gold holdings. The company has expanded its product offerings to include stablecoins pegged to other currencies, such as the euro, gold, the Mexican peso, and the offshore Chinese yuan.