TL;DR
- Tether holds $22.8 billion in Bitcoin and gold, plus $127 billion in Treasuries.
- CEO Paolo Ardoino states the firm has $7 billion in excess equity and high profits.
- S&P Global lowered Tether’s rating, citing higher exposure to high-risk assets.
The argument around Tether and the stability of USDT intensifies after the latest Q3 2025 attestation. The report shows that Tether now holds around $22.8 billion in Bitcoin and gold, alongside a huge block of U.S. Treasuries. For some market participants, that mix looks like prudent diversification. For Arthur Hayes, it looks like a dangerous rate trade wrapped around the largest stablecoin in crypto.
The attestation details roughly $127 billion in U.S. Treasury exposure, which has generated strong interest income since 2023. Hayes argues that Tether now leans heavily on that coupon stream while also betting on BTC and gold.
The Tether folks are in the early innings of running a massive interest rate trade. How I read this audit is they think the Fed will cut rates which crushes their interest income. In response, they are buying gold and $BTC that should in theory moon as the price of money falls.… pic.twitter.com/ZGhQRP4SVF
— Arthur Hayes (@CryptoHayes) November 29, 2025
In a recent note, he says Tether sits “in the early innings of a massive interest rate trade” and warns that a drop of about 30% in the combined Bitcoin + gold allocation would wipe out equity and leave USDT “in theory” insolvent.
Market analyst Paul Barron quantifies the interest rate angle
Using $127 billion in Treasuries as a base, he estimates that every 25 basis point cut from the Federal Reserve trims roughly $318 million per year from interest income. For traders who hold USDT in size, the key question centers on whether equity and retained earnings absorb both a rate shock and a drawdown in volatile assets.
Paolo Ardoino, CEO of Tether, replies with a flood of hard numbers. In a detailed X post, he states that Tether closes Q3 2025 with around $7 billion in excess equity, layered on top of $184.5 billion in stablecoin reserves, plus roughly $23 billion in retained earnings inside the broader Tether Group. Under that view, group assets reach close to $215 billion versus $184.5 billion in stablecoin liabilities. The Bitcoin + gold sleeve accounts for only 12.6% of reserves.
re: Tether FUD
From latest attestation announcement (Q3 2025):
"Tether will continue to maintain a multi-billion-dollar excess reserve buffer and an overall proprietary Group equity approaching $30 billion."
Tether had (at end of Q3 2025) ~7B in excess equity (on top of the…
— Paolo Ardoino 🤖 (@paoloardoino) November 30, 2025
Ardoino criticises commentators who ignore group equity and focus only on the narrow reserve pool. He notes that U.S. Treasuries alone generate close to $500 million in base profit per month at current yields and says that several online critics either misread the numbers or push rivals for personal gain.
Former Citi digital asset research head Joseph Ayoub backs part of that line. Ayoub points out that disclosed reserves do not equal total corporate assets. He explains that Tether runs a separate equity balance sheet that covers mining operations, corporate reserves and other ventures that sit outside standard attestation snapshots.
I spent 100’s of hours writing research on tether for @Citi. @CryptoHayes missed a few key points.
1) 𝐓𝐡𝐞𝐢𝐫 𝐝𝐢𝐬𝐜𝐥𝐨𝐬𝐞𝐝 𝐚𝐬𝐬𝐞𝐭𝐬 =/ 𝐚𝐥𝐥 𝐜𝐨𝐫𝐩𝐨𝐫𝐚𝐭𝐞 𝐚𝐬𝐬𝐞𝐭𝐬
When tether generates $ they have a separate equity balance sheet which they don’t… https://t.co/pHSRr245Up
— Joseph (@JosephA140) November 30, 2025
With around $120 billion in Treasuries delivering roughly 4% since 2023, Ayoub calculates close to $10 billion per year in liquid profit, generated by a firm with about 150 employees. He compares that profile with banks that operate on 5–15% liquid reserves, while USDT presents an overcollateralised model. His conclusion is blunt: “Tether is not heading toward insolvency; the company runs a money printing machine.”
Pressure on USDT intensifies after S&P Global lowers its peg-stability rating from 4 to 5 on 26 November. The agency cites higher exposure to “high-risk assets” and what it describes as ongoing gaps in disclosure. Ardoino answers with a confrontational tone and says that Tether wears that hostility “with pride”.
He describes the firm as “the first overcapitalized company in the financial industry, with no toxic reserves”. In a sharp jab at traditional banks, he challenges large institutions to publish reserve ratios and jokes that many balance sheets probably rely on “3 olives and a half chewed gum”.
Supporters in the wider crypto space echo that attack
Chris Pavlovski, CEO of Rumble, claims that S&P targets Tether because USDT threatens the old guard of finance. Backers highlight that USDT held its dollar peg during the 2018 crash, the Terra/Luna collapse in 2022, and the 2023 banking stress, while other issuers struggled under redemptions.
The S&P only attacks Tether, because Tether is challenging and beating the old financial guard at their own game.
These old corporate entities cannot handle companies like Tether & Rumble taking their market share — their only recourse is to attack us because they’re losing. https://t.co/UUbaYpXAUq
— Chris Pavlovski 🏴☠️ (@chrispavlovski) November 26, 2025
Under a “5” rating and MiCA rules, USDT cannot list on regulated EU exchanges, and large funds with strict mandates cannot hold the token directly. That constraint opens space for rivals such as Circle’s USDC, PayPal’s PYUSD, and various tokenized fiat products. At the same time, Tether reports net profit that outpaces firms like BlackRock and, according to some estimates, edges close to Saudi Aramco in absolute earnings.
The result is a sharp split in the market. On one side stands Arthur Hayes, who frames Tether as a giant rate and volatility trade loaded on top of the main stablecoin in crypto. On the other side stands Paolo Ardoino, who points to equity buffers, Treasury income, and multi-year profitability. In the middle, traders treat USDT as the main liquidity rail in crypto while regulators, rating agencies and competitors examine every new attestation for signs of weakness.
