Arthur Hayes Flags Potential Balance-Sheet Risk for Tether Amid Market Volatility

• Arthur Hayes warns that Tether’s heavy allocation to gold and Bitcoin increases potential balance-sheet risk.
• Despite concerns, Tether continues expanding USDT integration with Bitcoin Lightning, enhancing transaction speed and scalability.

The former of BitMEX CEO Arthur Hayes, has issued a serious warning about Tether’s evolving asset allocation, demonstrating potential structural vulnerabilities that could put the stablecoin under market stress. According to Hayes, Tether’s latest evidence shows a notable rotation away from traditional U.S. Treasuries into riskier holdings, roughly US$12.9 billion in gold and US$9.9 billion in Bitcoin (BTC).

Moreover, the reason he flags that the company has shifted a large portion of its reserves into volatile assets — specifically billions in gold and Bitcoin, rather than maintaining a reserve base dominated by stable, low‑risk instruments. He warns this matters because a steep drop, say 30%, in the value of those gold, in addition Bitcoin holdings could wipe out Tether’s equity cushion and render USDT theoretically insolvent. As he put it:

The effect of this, if this is correct, could ripple across the crypto ecosystem. Especially, confidence in USDT’s dollar‑peg might erode, prompting major holders or exchanges to demand real-time balance‑sheet transparency. Which is a move that could trigger market stress and wider scrutiny over stablecoin backing.

According to recent data both from Reuters and Financial Times, credit‑rating agency S&P Global Ratings recently downgraded the stability rating of Tether’s stablecoin to “weak,” citing increased exposure to high‑volatility assets such as Bitcoin, gold, corporate bonds, and secured loans.

Tether Exposure May Pressure Bitcoin

In our recent report, Tether CEO rebuked S&P Global following the USDT risk warning, emphasizing the company’s confidence in its balance sheet despite of this concerns over its exposure to volatile assets like gold and Bitcoin. This tension underscores how market perceptions of USDT’s stability could influence Bitcoin price movements, as any perceived risk to the stablecoin’s peg may trigger broader crypto market reactions.

In addition, we also further highlighted that Tether’s USDT integration with Bitcoin Lightning marks a return to its roots while unlocking faster, scalable, and private stablecoin transactions. As regulatory clarity improves, Tether positions USDT as a viable bridge between crypto-native innovation and traditional financial infrastructure, underscoring how market perceptions of USDT’s stability could influence Bitcoin price movements.

As of now, Bitcoin is trading at the price of $86,100.86, reflecting a 5.32% increase in the past day and 1.02% in the past week. See BTC price chart below.