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Comment by saaaaaam | Hacker News Reader

Is the company valued at $500 billion or is the sum of the digital assets they’ve collateralised worth $500 billion?

Because if you buy the tokens you presumably do not own the company. And if you buy the company you hopefully don’t own the tokens - nor the assets that back the tokens.

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I think I read that its valued at 500 billion based on their latest fund raise. I don't know the total holdings they have.

I have no interest in crypto, just wanted to mention this which was surprising to me when I heard it.

Wow, yes they claim to be raising a round valuing them at $500bn. Which is crazy given the market cap of their token is only apparently $173bn.

https://www.reuters.com/business/crypto-firm-tether-eyes-500...

I struggle to see how those numbers stack up.

For comparison Blackstone is worth ~$180bn with ~$1 trillion AUM.

So somehow this crypto firm and its investor think it can get a better return than Blackstone with a fraction of the assets. Now, sure, developing market and all that. But really? If it scaled to Blackstone assets level of $1 trillion then you’d expect the platform valuation to scale, perhaps not in lockstep but at least somewhat. So with $1 trillion in collateralised crypto does that make Tether worth $1.5 trillion? I’d love someone to explain that.

If my mom gives me 1000 dollars for 1% of my lemonade stand, that doesn't mean my stand is worth 100k. Tether is in talks with investors to mayb raise 20b at a 500b valuation. Keep in mind also that crypto investors overvalue companies to create the hype and then lobby for better regulations etc. It doesn't mean at all that someone would be interested to buy 100% of tether for 500b. Now, if they were public is a different story, like Tesla etc

Well indeed. That was pretty much my point.

What if a stranger who regularly invests and has criteria and terms/conditions and buys 1% of your lemonade stand for $1000.

Tether is projected to generate $15 billion in profits. So 500 billion is like a 33 times earnings multiple.

Now the main thing is how sustainable these earnings are and if they will continue to be a dominant player in stable coins and if there will continue to be demand for them.

Another difference to Blackstone is Tether takes 100% of the returns on the treasuries backing the coins, whereas Blackstone gets a small fee from AUM, and their goal is to make money for their investor clients.

If crypto wanted to really be decentralized they'd find a way to have stable coins backed by whatever assets where the returns of the assets still came to the stable coin holder, not some big centralized company.

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