• Arthur Hayes has publicly warned that Tether’s elevated publicity to Bitcoin and gold may pose solvency dangers if costs fall.
• Hayes argued {that a} 30% drop in Bitcoin and gold holdings may exhaust Tether’s capital buffer and theoretically render USDT bancrupt.
• Outstanding on-chain crypto analyst Willy Wu requested Grok to match Tether’s asset backing to conventional banks.

Arthur Hayes has publicly warned that Tether’s elevated publicity to dangerous belongings (i.e. Bitcoin and gold) may pose a solvency threat if costs decline.

In keeping with Tether’s Q3 2025 Certification Report, the corporate holds roughly $12.9 billion in gold and $9.9 billion in Bitcoin, along with conventional money, U.S. Treasuries, repurchase agreements, and different devices.

Hayes argued {that a} 30% drop in Bitcoin and gold holdings may wipe out Tether’s capital buffer and theoretically render USDT bancrupt. His publish sparked new doubts and debate throughout the crypto group.

Akash Community founder Greg Osuri known as Tether a ticking time bomb, and famous on-chain crypto analyst Willy Woo requested Grok to match Tether’s asset backing to conventional banks.

Evaluating Tether’s reserve buffer to conventional banks

The immediate confirmed that as of September 2025, Tether had $181 billion in belongings to cowl $174 billion in debt.

As Hayes identified, about 75% to 80% of reserves are held in secure, easy-to-sell belongings akin to money and U.S. Treasuries, whereas 20% to 25% are held in riskier investments akin to Bitcoin and gold, that are liquid however weak to falling costs.

When in comparison with banks, Mr. Gloch stated the everyday U.S. financial institution solely holds 10 to twenty p.c of its funds in money or secure securities, with the bulk tied up in loans. Though they maintain a lot much less money readily available (about 10%), they’ve two giant security nets: FDIC deposit insurance coverage and entry to emergency funds from the Federal Reserve.

Total, Grok famous that banks are extra resilient as a result of Tether’s foremost safety is extra belongings than liabilities, however Tether doesn’t have a authorities backstop and has beforehand misplaced its $1.00 peg. Banks, then again, are supported by the federal government however can nonetheless fail.

A couple of days in the past, credit standing company S&P downgraded Tether’s USDT stablecoin to the bottom potential score on its stability scale, labeling it weak. USDT’s score is at present 5, which is the bottom potential rating on S&P’s 1 to five scale.

The rationale for the downgrade is that Tether holds extra reserves in riskier belongings akin to Bitcoin, gold, company bonds, and loans, quite than pure money.