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Bigger than Coca-Cola? If Tether goes public, it could reach a valuation of $515 billion

A recent analysis published by Artemis CEO John Ma sparked a discussion about the potential market valuation of Tether, suggesting that if the company were to go public, it could be valued at $515 billion. This figure would place it among the largest companies in the world by market capitalization, ahead of well-known names like Costco and Coca-Cola. John Ma's analysis draws multiple comparisons and key assumptions to arrive at this valuation. Circle, the issuer of USDC, recently reported a market cap of $30 billion. Circle's financial model projects MA to reach $410 billion in EBITDA for 2025, which equates to an EBITDA multiple of 69.3x. Tether recorded $13 billion in net profit for 2024, with $7 billion coming from treasury and re-hypothecation and $5 billion from unrealized gains on Bitcoin and Gold Holdings, the latter of which was not included in the earnings before interest, taxes, depreciation, and amortization calculations, causing the valuation to connect: "And a slight drop considering Bitcoin + Bitcoin + Gold Treasury." However, he acknowledged that $515 billion is a "nice number" and that it is "modest" for the valuation. Comments from Bitcoin advocates and entrepreneurs Jack Mallers and Anthony Pompliano suggested that the valuation should be at least $1 trillion. How the $515 billion valuation was calculated assumes Jon Ma's projection that Tether will increase its USDT supply by $50 to $60 billion in 2025, leading to an average supply of $170 billion. With an average federal funds rate of 4.2%, this means the 2025 projected EBITDA would be around $7.4 billion. By applying the current EBITDA multiples of 69.3x in Circle to the earnings before interest, taxes, depreciation, and amortization, the analysis arrives at $515 billion. However, John Ma notes that using the current EBITDA in Circle is a strong assumption and may not be sustainable, highlighting the speculative nature of the calculation. Tether, the issuer of the USDT stablecoin, has become a pillar of the crypto ecosystem. USDT is widely used for trading, remittances, and as a stable store of value, with supply steadily growing as demand for stablecoins increases. Under Ardoino's leadership, Tether has maintained its position as the largest stablecoin by market cap and the third-largest cryptocurrency behind Bitcoin and Ethereum. Ardoino, who also serves as CTO of Bitfinex, emphasized the importance of transparency and security in Tether's operations. The company’s profits are derived primarily from interest earned on its reserve assets, which include U.S. treasuries and repurchase agreements, as well as gains from Bitcoin and Gold Holdings. Over the years, Tether has expanded its product offerings to include stablecoins pegged to other currencies, such as the Euro (EURT), Gold (XAUT), Mexican Peso (MXNT), and Offshore Chinese Yuan (CNHT). Tether’s stablecoins are used by millions of individuals and institutions worldwide, facilitating 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 highlights Tether's significant impact in the crypto and traditional finance sectors. However, whether Tether becomes one of the next public offering success stories from Crypto remains to be seen.

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