Tether has scaled back its ambitious plans to raise up to $20 billion due to investor resistance to a proposed valuation that could reach $500 billion. Advisers are now exploring a more modest fundraising goal of around $5 billion. Concerns from potential investors center on the size of the deal and Tether’s valuation, especially given its comparison to major companies like SpaceX and ByteDance. Despite Tether generating approximately $10 billion in profit last year, skepticism remains about its reserves and transparency, especially in light of ongoing regulatory risks. CEO Paolo Ardoino clarified that the earlier funding figures were misunderstood, stating they represented a ceiling rather than a target. He emphasized that Tether has limited operational needs for external capital, with insiders hesitant to sell shares. Tether's ongoing scrutiny includes questions about the quality of its reserves and its involvement in illicit activities, despite quarterly attestations from BDO Italia that have not equated to a full audit. In the past year, S&P Global downgraded Tether’s reserve assessment due to increased exposure to volatile assets like bitcoin and gold. In the broader market, BlackRock’s digital assets chief, Robert Mitchnick, highlighted concerns about the heavy use of leverage in bitcoin derivatives, arguing it undermines bitcoin's image as a stable investment. While he acknowledged bitcoin's strong fundamentals as a decentralized asset, he noted that its trading patterns resemble a "levered NASDAQ," complicating its appeal for conservative investors. Mitchnick pointed to perpetual futures platforms as the main drivers of current volatility, rather than exchange-traded funds like BlackRock’s iShares Bitcoin ETF.