• SoftBank and Ark Investment Management are reportedly in discussions to participate in a Tether funding round that could value the stablecoin issuer at $500 billion.
  • The round, which may raise up to $20 billion, would be one of the largest private placements for a crypto-related company.
  • The talks signal a significant deepening of institutional interest in cryptocurrency infrastructure, despite ongoing regulatory uncertainties.

Efforts by Tether to secure a massive capital infusion have drawn interest from two prominent technology investors, according to people familiar with the matter. SoftBank Group Corp. and Cathie Wood’s Ark Invest are in early-stage talks to potentially lead a funding round that could value Tether at approximately $500 billion.

The discussions, which are still fluid and could fall apart, center on an investment of up to $20 billion. This would represent an unprecedented bet on the infrastructure underpinning the digital asset market. Tether’s USDT stablecoin, pegged 1:1 with the U.S. dollar, dominates the crypto trading landscape with a market capitalization exceeding $170 billion and daily trading volume often surpassing $150 billion.

A deal of this magnitude would underscore a major shift in perception among large, traditional investment firms. For years, Tether has operated under a cloud of regulatory scrutiny concerning the composition of its reserves. However, its recent financial performance has been formidable; the company posted $1.3 billion in profit in the second quarter of 2024 alone, bringing its total for the first half of the year to $5.2 billion.

“This is about betting on the plumbing of the entire crypto economy,” said one person briefed on the discussions, who asked not to be identified because the talks are private. “The growth is mind-blowing, and these investors are looking beyond the noise to the fundamental utility.”

Representatives for SoftBank, Ark Invest, and Tether did not immediately respond to requests for comment. The structure of the potential investment and the specific roles of SoftBank and Ark remain under discussion. It is unclear whether other investors might join the round.

The talks come as Tether continues to cement its market position. CEO Paolo Ardoino recently highlighted the company surpassing $160 billion in market cap as a major milestone. Meanwhile, the company has been streamlining its operations, announcing the termination of USDT support on several smaller blockchain networks to focus on more scalable Layer 2 solutions.

For SoftBank, an investment would mark a renewed and substantial foray into crypto assets after previous ventures saw mixed results. For Ark Invest, which has long been a vocal proponent of Bitcoin and disruptive technology, it would be a logical expansion of its blockchain-focused strategy.

Without a successful funding round, some analysts suggest Tether could face heightened challenges in maintaining its growth trajectory against increasing competition and potential regulatory headwinds. The outcome of these talks will be closely watched as a barometer for institutional confidence in the core infrastructure of the digital asset world.