Tether, the company behind the largest crypto stablecoin, is now worth $500B, the same as OpenAI.
This sounds crazy, but their current quarterly profit is $5B so that's a PE ratio of 25.
https://www.cnbc.com/2025/09/23/tether-reportedly-seeks-lofty-500-billion-valuation-in-capital-raise-.html
I have tulips to sell! Ten pence for one! Not a bubble!
Pro
Tether and OpenAI are both worth $500B
The difference between these two companies is that the technology behind OpenAI's product is so insanely complicated that it takes a team of $1m/year PhD engineers to develop and they make no money and the technology behind Tether is so incredibly simple you could explain it to a toddler and they make $20B/year.
Rising Star
Virtually all of that $5B profit is just interest on the Treasuries they hold.
Pro
That depends
If they maintain their market share, interest rates stay where they are and they can continue to not pay interest to holders, there's no reason to think that their margins go anywhere
So the risks are
1. They lose market share to other stablecoins
2. Interest rates on bonds fall
3. Market competition from other stablecoins forces them to pay a proportion of their profits as interest to holders
Do you see any of those things changing any time soon? I don't...at least outside the US and most Tether is held outside the US. In the US, they might support interest on stablecoins. I don't think other countries will because encouraging citizens to hold stablecoins is effectively encouraging them to dump the local currencies for USD.
Chief
This absolutely can’t be a bubble
Pro
Well, Tether actually makes money and, as long as people in the developing world prefer to hold dollars instead of their local currency, they probably will continue to.
It makes sense for the US to encourage this too because it increases demand for US bonds.
Pro
Why is Tether worth so much?
Tether is just a smart contract on Ethereum, Tron and Solana that tracks ownership of a token called USDT. Each USDT is redeemable for $1 so it's always worth $1.
Anyone (well, not anyone, usually is just the exchanges doing this) can mint 10,000 new USDT by sending them $10,000 (that's the min).
~20% of the funds they hold and held in cash, ~80% are invested, mostly in bonds and , because USDT tokens don't pay interest, the interest they receive from their bonds is pure profit.
Last quarter (Q2 2025), they made $4.9B which is $20B in profit per year. That's a PE ratio of 25 at $500B.
Notable is that they've done this with less than 100 employees and the founder's business before this was a World of Warcraft gold mining + selling on eBay operation.
Pro
They haven't been audited by the Big 4, not because they rejected one, but because Big 4 rejected them. No wanted to take the risk.
Hopefully that changes soon.
Only thing is i don’t see Tether listing like Circle did (issuer of USDC which went up to $60BN MC) - still kicking myself for missing that IPO… closest thing to tether exposure is Plasma so loaded up ok that today with their token event
I loved the circle IPO - once it shot up to over $250 I bought puts….
Interesting post; I had no idea of the scale. 🤯
Dumb question, what is the point of USD Stable coins? The coin is pegged 1:1 with dollars, right?
From the outside, I don't see any benefit when compared a cash position at a bank, or direct Treasury purchase (both of which pay some form of interest)
Rising Star
The real answer is that crypto is traded in pairs. So it's very straightforward to exchange one coin/token for another. However buying crypto with currency in the first place is significantly less straightforward and then selling the crypto to get currency back is even less straightforward than that. Creating a stable coin allows for the creation of trading pairs between it and other cryptos and then treating the stable coin as a sweep account, basically serving as a bridge between the real world and the crypto world. For this to work however requires 100% faith in the stable coin.