Concerns about Tether’s solvency resurfaced after BitMEX founder Arthur Hayes warned the stablecoin issuer could be in trouble if its reserve assets plunged. In a Dec. 5 market update, CoinShares head of research James Butterfill pushed back, calling those fears “misplaced.”
Butterfill cited Tether’s latest attestation showing roughly $181 billion in reserves against about $174.45 billion in liabilities, leaving an estimated surplus near $6.8 billion. He noted that while stablecoin risks deserve attention, the current figures do not point to a systemic vulnerability.
Hayes has argued Tether is effectively running a large interest-rate-style position and that a 30% decline in its Bitcoin and gold holdings would erase equity and render USDT technically insolvent. Bitcoin and gold make up significant portions of Tether’s reported reserves, and the company has increased its gold exposure in recent years.
S&P Global recently downgraded USDT’s ability to defend its dollar peg, citing exposure to what it calls higher-risk assets including gold, loans and Bitcoin. Tether CEO Paolo Ardoino dismissed the downgrade as Tether FUD, pointing to the third-quarter attestation in the company’s defense.
Tether remains highly profitable, reportedly generating about $10 billion in the first three quarters of the year. It is the largest stablecoin by circulation, with roughly $185.5 billion in USDT outstanding and an estimated 59% market share according to CoinMarketCap.
