BitMEX Founder Warns Tether’s Bitcoin Bet Could Trigger USDT Collapse

Tether’s latest Q3 2025 attestation reveals the stablecoin giant now holds approximately $22.8 billion in gold and Bitcoin, a diversification strategy that BitMEX founder Arthur Hayes warns could trigger USDT’s collapse.

CEO Paolo Ardoino announced the company maintains “a multi-billion-dollar excess reserve buffer and an overall proprietary Group equity approaching $30 billion,” but Hayes argues this diversification masks dangerous exposure to volatile assets.

Hayes contends Tether is positioning for Federal Reserve rate cuts that would crush their Treasury income.

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

“The Tether folks are in the early innings of running a massive interest rate trade,” Hayes wrote, adding that “a roughly 30% decline in the gold + BTC position would wipe out their equity, and then USDT would be in theory insolvent.”

Analyst Paul Barron noted that for every 25 basis point Fed decrease, USDT’s annual interest income drops approximately $318 million based on its $127 billion Treasury exposure.

Tether CEO Fires Back with Detailed Financial Disclosures

In a recent X Post, Ardoino swiftly countered Hayes’s insolvency claims with comprehensive data.

“Tether had (at end of Q3 2025) ~7B in excess equity (on top of the ~184.5B stablecoin reserves) + another ~23B in retained earnings as part of our Tether Group equity,” the CEO explained.

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

Tether Group’s total assets reach approximately $215 billion against $184.5 billion in stablecoin liabilities, with gold and Bitcoin representing just 12.6% of reserves.

The CEO accused critics of deliberately misrepresenting Tether’s position.

“S&P made the same mistake of not considering the additional Group Equity nor the ~500M in monthly base profits generated by U.S Treasury yields alone,” Ardoino stated, suggesting “some influencers are either bad at math or have the incentive to push our competitors.”

His defense comes after S&P Global downgraded USDT’s peg-stability rating from 4 to 5 on November 26, citing increased exposure to “high-risk“ assets and “persistent gaps in disclosure.“

Industry Veterans Dismantle Tether’s Insolvency Claims

Joseph Ayoub, former head of digital asset research at Citi, noted that Tether’s disclosed assets don’t represent all corporate holdings.

“Their disclosed assets =/ all corporate assets,” he explained, noting Tether maintains a separate equity balance sheet comprising mining operations and corporate reserves that aren’t publicly reported.

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 roughly $120 billion in interest-yielding Treasuries generating approximately 4% returns since 2023, Tether produces around $10 billion in liquid profit annually with just 150 employees.

Ayoub noted that banks operate on significantly lower fractional reserves of 5-15% in liquid assets compared to Tether’s overcollateralized structure.

His conclusion, “Tether isn’t going insolvent, quite the opposite; they own a money printing machine.“

S&P Downgrade Sparks Fierce Industry Backlash

Ardoino responded defiantly to S&P’s rating action and recurrent criticism of Tether’s operational model.

“We wear your loathing with pride,” the CEO declared, positioning Tether as “the first overcapitalized company in the financial industry, with no toxic reserves” that proves “the traditional financial system is so broken that it’s becoming feared by the emperors with no clothes.”

He challenged banks to publish their reserve ratios, suggesting they likely consist of “3 olives and a half chewed gum.“

Rumble CEO Chris Pavlovski added that “The S&P only attacks Tether, because Tether is challenging and beating the old financial guard at their own game.”

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

The attacks surprised many, considering USDT maintained its peg through the 2018 crash, 2022 Terra/Luna collapse, and 2023 banking crisis.

Yet the downgrade carries serious implications.

With a “5” rating and MiCA regulations prohibiting USDT from EU exchanges, no major institutional fund can legally hold the stablecoin.

This could favor competitors like Circle’s USDC, PayPal’s PYUSD, or tokenized fiat alternatives, potentially shifting liquidity away from a company that generated more net profit than BlackRock last year and is tipped to surpass Saudi Aramco in profitability.