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 value of Tether, suggesting that if the company were to go public, it could achieve a valuation of $515 billion. This figure would position 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 several key comparisons and assumptions to arrive at this valuation. Circle recently published its market cap of $30 billion. Circles' financial model projects an EBITDA of $410 billion for 2025, which equates to an EBITDA multiple of 69.3x. Tether recorded $13 billion in net earnings for 2024, with $7 billion coming from treasury and reinvestment 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 was the $515 billion valuation calculated? Jon Ma's projection assumes 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 that the expected 2025 EBITDA will be around $7.4 billion. By applying the current 69.3x EBITDA multiples 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, transfers, 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 primarily derive 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), the Mexican peso (MXNT), and the offshore Chinese yuan (CNHT). Tether's stablecoins are used by millions of individuals and institutions around the world, 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 cryptocurrency and traditional finance sectors. However, whether Tether will become one of the upcoming public offering success stories from the crypto space remains to be seen.
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