A recent analysis published by Artemis CEO Jon Ma has sparked a discussion about Tether's potential market value, suggesting that if the company were to list, its valuation could reach $515 billion. This figure would place Tether among the largest corporations in the world by market capitalization, surpassing well-known names like Costco and Coca-Cola.

Jon Ma's analysis presents several important comparisons and assumptions to arrive at this valuation. The company issuing USDC, Circle, has recently listed with a market capitalization of $30 billion. Ma's financial model predicts Circle will reach $410 billion in EBITDA by 2025, equivalent to an EBITDA multiple of 69.3 times.

Tether reports a net profit of $13 billion in 2024, with $7 billion coming from Treasuries and repo contracts and $5 billion from unrealized gains from Bitcoin and gold holdings, the latter of which is not included in the EBITDA calculation, prompting Tether's CEO Paolo Ardoino to provide the following valuation:

"It seems a bit pessimistic considering our current (and growing) Bitcoin + Gold treasury."

However, he acknowledged that $515 billion is a 'nice number' and he is 'humble' before this valuation. Comments from Bitcoin supporters and entrepreneurs Jack Mallers and Anthony Pompliano suggest that the valuation should be at least $1 trillion.

The calculation of Tether's $515 billion valuation

Jon Ma's forecast suggests that Tether will increase the supply of USDT by an additional $50–60 billion by 2025, resulting in an average supply of $170 billion. With the average Federal Funds Rate at 4.2%, this would imply that the projected EBITDA in 2025 is around $7.4 billion. By applying Circle's current EBITDA multiple of 69.3x to Tether's expected EBITDA, the analysis would reach $515 billion.

However, 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, the issuer of the USDT stablecoin, has become a pillar of the cryptocurrency ecosystem. USDT is widely used for trading, remittances, and as a stable store of value, with a steadily increasing supply as demand for stablecoins rises. Under Ardoino's leadership, Tether has maintained its position as the largest stablecoin by market capitalization and is the third-largest cryptocurrency after Bitcoin and Ethereum.

Ardoino, who is also the CTO of Bitfinex, emphasized the importance of transparency and security in Tether’s operations. The company’s profits primarily come from interest earned on its reserves, including U.S. Treasuries and repos, as well as profits from held Bitcoin and gold.

Over the years, Tether has expanded its product portfolio 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 organizations worldwide, facilitating efficient cross-border transactions and serving as a bridge between traditional finance and the cryptocurrency market. The company has also invested in initiatives related to technology and sustainable energy, continuing to integrate into the global economy.

While the $515 billion valuation is a theoretical exercise based on current market multiples, it highlights Tether's significant influence in the cryptocurrency and traditional finance sectors. However, whether Tether will become one of the next successful IPO stories in cryptocurrency remains to be seen.