What is the logic behind Tether's valuation of 500 billion? Everyone is looking at the comparison between stablecoin issuance and USDC, and thinks the valuation is very high. I expect Tether to present to investors the logic of net profit and business growth rate: 1. Tether's net profit in 2024 was $13 billion, and in the second quarter of this year, its net profit reached a new high of $4.9 billion, which means that Tether's net profit for the whole year of 2025 may exceed that of 2024, reaching $14 or even $15 billion. If we calculate PE based on net profit: 500 billion US dollars corresponds to a net profit PE of over 40 times for 24 years, and a net profit PE of over 30 times for 25 years, we can see if PE is still good. However, Circle's net profit for 24 years was only $250 million, and it still incurred a loss in the second quarter of this year. The difference in comparison is significant: one has a net profit of 13-15 billion US dollars per year, while the other has a net profit of several hundred million US dollars from oil last year and is still losing money this year. 2. The business growth rate has increased by more than 40% in the issuance of USDT over the past 24 years. The issuance of USDT in the first three quarters of 25 years has already increased by 26%, and it is expected that the annual increase in USDT issuance in 25 years will also reach around 40%. A company that grows its business by 40% annually, giving itself a PE of over 30 times seems reasonable. Circle's business growth rate can keep up, but the difference in net profit scale compared to Tether is too large. Let's talk about Tether's profit sources: 1) In 24 years, 80% of Tether's US dollar reserves are treasury bond, and 20% of Tether's US dollar reserves are non compliant reserve assets such as gold, Bitcoin, and other mortgages (under the framework of the Stable Currency Act). Tether's net profit is $13 billion: more than $7 billion comes from the interest rate income of treasury bond, and more than $5 billion comes from the unrealized gains and losses of gold and Bitcoin, as well as other borrowing and lending business income (all of which come from non compliant reserve assets). Equivalent to 20% of non compliant reserve assets contributing over 40% of net profit, this is the fundamental reason why Terher needs equity financing to replace this portion of non compliant assets. 2) In fact, the majority of Circle's revenue is spent on channel fees, with a very high proportion of channel fees paid to Coinbase, as well as compliance costs. And both parts of Tether are missing. It is expected that compliance costs for Tether will increase in the future, although channel fees may still not be available. 3) Of course, investors will be worried that the compliance cost will erode the net profit after compliance, and that the interest rate of treasury bond bonds will fall due to the interest rate cut, and the profit income will also fall. That depends on how Tether can convince investors that its business growth rate can continue to maintain under the wave of stablecoins, and that compliance can also boost business growth.