Bitcoin News Today: S&P's Tether Downgrade Ignites Crypto-Traditional Finance Clash

The cryptocurrency market navigated a period of muted volatility in late November 2025 as key figures remained silent amid a critical juncture for stablecoins. S&P Global Ratings' downgrade of Tether's USDT stability rating to "weak" sparked immediate debate among Chinese traders, who rely heavily on the stablecoin for illicit trading activities despite the 2021 crypto ban. The agency cited Tether's 5.6% Bitcoin exposure-exceeding its stated 3.9% buffer-and opaque reserve disclosures as risks to USDT's 1-to-1 peg with the dollar. Over 20 million Chinese users hold Bitcoin through underground channels, leveraging USDT as a primary gateway to digital assets, making the downgrade a pivotal moment for the region's shadow economy.

Tether CEO Paolo Ardoino dismissed the downgrade as a reflection of "loathing" from traditional finance, asserting that the company's $181.2 billion reserves-comprising $113 billion in US Treasuries, $9.9 billion in Bitcoin, and $12.9 billion in gold-prove its resilience. He framed the critique as part of a broader resistance from legacy institutions toward decentralized models, emphasizing Tether's profitability and absence of "toxic" assets. Meanwhile, BitMask's launch of the RGB20 protocol introduced a new layer of Bitcoin-native programmability, enabling atomic swaps and non-custodial trading of fungible and non-fungible assets. This innovation, coupled with Tether's planned issuance of stablecoins on the RGB network, could inject $174.4 billion in liquidity into Bitcoin's ecosystem, attracting institutional builders and capital.

The downgrade's market impact remained mixed. While Chinese traders debated the credibility of past warnings about USDT's stability, BlackRock's spot Bitcoin ETF holders rebounded to a $3.2 billion profit as Bitcoin surpassed $90,000. The ETF inflows, which resumed after weeks of outflows, signaled renewed investor confidence, particularly as Federal Reserve rate-cut expectations rose. However, Tether's operational challenges extended beyond ratings: the firm closed its Uruguay mining operations due to unmet energy cost negotiations, highlighting the fragility of its infrastructure .

As the market stabilizes, the interplay between regulatory scrutiny, technological innovation, and institutional adoption will define the next phase of crypto's evolution. S&P's concerns about reserve transparency and Tether's rebuttal underscore the ongoing tension between traditional finance's risk-averse norms and the crypto sector's pursuit of autonomy. For now, the absence of high-profile interventions suggests a temporary equilibrium, but the stakes remain high for both stablecoins and Bitcoin's expanding utility.