The downgrade of Tether’s USDT stability by S&P Global Ratings continues to raise differing views within the crypto community.
The stablecoin was given a negative ‘weak’ rating, with S&P Global citing rising exposure to ‘high riskassets such as Bitcoin and gold.
Commenting on the report, BitMEX founder Arthur Hayes stated that Tether has increased its exposure to BTC and gold to fuel the typical rally that comes with cutting Fed interest rates. However, he warned,
“A drop of about 30% in the gold + $BTC position would wipe out their shares, and then USDT would theoretically be insolvent.”
Source: Tether
According to the Q3 report shared by Tether, but not independently verified by third parties, the company’s USDT was backed by $139 billion in cash and cash equivalents.
The remaining coverage was dominated by ‘illiquid’ assets, including gold, BTC, loans and other instruments.
Mixed opinions on perceived Tether risks
Some analysts backed Hayes’ warning. For his part, Ethereum community member Ryan Berckmans said: said,
“Why is ~$40 billion of USDT backed by assets that are riskier than cash and cash equivalents? If my stablecoin operator keeps all the proceeds, I at least want them to be fully backed by reserves with minimal risk.”
The transparency of Per Tether report As of the third quarter, it had $174 billion in USDT liabilities.
Compared to about $140 billion in cash and cash equivalents, this meant that with a liquidity run and widespread immediate redemption, Tether would have a $34 billion shortfall.
For the founder of Akash Network Greg Osurithe cash asset differential was a ‘ticking time bomb’ for USDT.
Source:
Tether’s BTC reached $8 billion
Put another way, Tether was a solvent paper, its assets of $181 billion exceeding its liabilities of $174 billion. But it was not fully liquid and functioned like a fractional reserve design used by traditional banks.
But others disagreed with Hayes’ opinion. For example, Mr. Anderson has countered the 30% decline and added,
“A mark-to-market dip is not insolvency. Insolvency means assets
So does Joseph Ayoub, a former crypto research leader at Citibank debunked Hayes’ warning and emphasizes:
“Tether is not going bankrupt, on the contrary; they own a money printing machine.”
As of 2025, Tether was among the top BTC holderswith 87.2K BTC worth approximately $8 billion at current prices. It has also doubled the amount of gold and is the top copper in Q3.
Source: Arkham
Final thoughts
- Analysts were divided on the underlying stability risk of Tether’s USDT based on its self-reported reserve backing assets.
- Tether doubled the amount of BTC and gold in reserve in 2025, increasing its supply to 87,000 BTC.