Bitcoin News Today: Tether's Bitcoin-Gold Bet Risks Insolvency Amid Liquidity Claims

Tether's strategic shift toward Bitcoin and gold reserves has sparked renewed scrutiny, with Arthur Hayes, co-founder of BitMEX, warning that a 30% market correction in these assets could erase the stablecoin issuer's equity buffer and risk insolvency. Hayes' critique centers on Tether's third-quarter 2025 attestation, which reveals $9.9 billion in Bitcoin and $12.9 billion in gold holdings, alongside $112.4 billion in U.S. Treasury bills and $21 billion in repo agreements. He argues this allocation reflects a "macro hedge" against anticipated Federal Reserve rate cuts, which would reduce yields on Tether's Treasury portfolio. However, the firm's reliance on volatile assets introduces asymmetric risk, particularly as its equity cushion is reportedly thin relative to its $181.2 billion balance sheet according to CoinCentral.

Hayes' concerns align with S&P Global's recent downgrade of Tether's stability rating to the lowest tier, citing the firm's growing exposure to non-fiat collateral. The rating agency highlighted the potential for reserve undercollateralization during market stress, a risk amplified by Tether's lack of a central bank backstop . Despite these warnings, Tether maintains that its operational liquidity remains robust, with $140 billion in cash and equivalents to cover redemptions. The firm also points to its $10 billion annual profits from Treasury holdings and mining operations as a buffer against volatility.

Industry stakeholders have pushed back against the insolvency thesis, emphasizing structural differences between Tether and traditional banks. Tran Hung, CEO of UQUID Card, noted that Tether's reserves include highly liquid instruments sufficient to cover most USDT redemptions, even if equity were wiped out according to TradingView. Cory Klippsten of Swan Bitcoin acknowledged the leverage risk but highlighted Tether's $15 billion profit projection for 2025 and its capacity to recapitalize if needed according to TradingView. Former Citi analyst Joseph further argued that Tether's corporate balance sheet-separate from its USDT reserves-includes undisclosed assets like mining infrastructure and equity investments, bolstering its financial resilience .

Tether's asset strategy appears to balance yield optimization with macroeconomic hedging. The firm has been aggressively purchasing U.S. Treasury bills, adding $44 billion since July 2025 to meet regulatory requirements under the GENIUS Act. Simultaneously, it has amassed 116 tons of gold, valued at $14 billion, to support its USDT stablecoin and XAUt token . Paolo Ardoino, Tether's CEO, dismissed S&P's downgrade, criticizing legacy rating models for their historical failures and asserting the firm's transparency and capital adequacy .

The debate underscores broader tensions in the stablecoin sector. While Tether's approach leverages high-yield Treasuries and strategic reserves, its exposure to Bitcoin and gold introduces market risks that could test its peg during periods of stress. As Hayes noted, a 30% drawdown in these assets would force exchanges and institutional holders to demand real-time balance sheet transparency, potentially destabilizing confidence in USDT. For now, Tether's liquidity buffers and profitability appear to mitigate immediate concerns, but the structural vulnerabilities remain a focal point for regulators and market participants alike.