- Hayes warns Tether’s gold and Bitcoin bets could hurt reserves if markets drop.
- A 30% fall in those holdings could erase equity and trigger solvency worries.
- CoinShares says Tether holds a strong surplus and over US$10 billion yearly profit.
CoinShares has downplayed recent concerns over the stability of Tether (USDT) following comments from former BitMEX CEO Arthur Hayes. Hayes has warned that Tether’s large positions in Bitcoin and gold could leave the stablecoin vulnerable if markets moved sharply, possibly putting its reserves under pressure and raising solvency questions.
Hayes said Tether appears to be making a big interest-rate bet and the latest audit shows the company expects the Federal Reserve to cut rates, which would reduce the interest income Tether earns on its reserves. To prepare for that, he says Tether is buying gold and Bitcoin, assets that could rise if borrowing costs fall.
The analyst warned that if the value of Tether’s gold and Bitcoin holdings dropped by around 30%, it could wipe out the company’s equity and make USDT technically insolvent.
CoinShares Says the Numbers Show a Strong Buffer
However, CoinShares said the latest data shows that these fears are largely unfounded. According to the firm, Tether holds total reserves of over US$181 billion against roughly US$174.45 billion in liabilities, leaving a surplus of about US$6.78 billion. The stablecoin issuer has also earned more than US$10 billion in profit this year, driven by interest income from U.S. treasuries, repo agreements and other short-term assets.
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The firm explained that while stablecoin risks should never be ignored, the current figures indicate Tether has a strong cushion to withstand market volatility. CoinShares said that the crypto market should focus on liquidity trends and treasury discipline rather than dramatic warnings, adding that Tether’s reserve position remains secure for now.
Macro Volatility Keeps Crypto on Edge
Stress in Japan’s government bond market has shaken global markets and added new uncertainty to crypto trading. A weak 20-year bond auction showed investors are becoming worried about Japan’s long-term debt. Since Japan has been a major source of global liquidity for years, even signs of reduced overseas investment are enough to affect markets from U.S. bonds to Bitcoin.
Despite this, CoinShares says stablecoins like Tether still look safe for now and do not face any immediate solvency problems.
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Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
Source: https://coinedition.com/hayes-warns-of-tether-trouble-coinshares-fires-back-with-hard-data/
