The debate over Tether’s financial strength intensified after BitMEX exchange co-founder Arthur Hayes and Tether CEO Paolo Ardoino offered their interpretations of the company’s risk strategy, which issues USDT, the market’s largest stablecoin.
Hayes described what he called a “massive operation” based on interest rates. According to Hayes, The company would expect a rate cut by the Federal Reserve. This would significantly reduce income from government bonds, in which most of the reserves are invested.
For this reason, Hayes said Tether is diversifying into assets such as gold and Bitcoin (BTC) as a hedging strategy. That’s because these assets tend to rise in value when the cost of money falls. The problem for Hayes is a significant drop in the price of Bitcoin or gold, which would impact USDT collateral.
The BitMEX co-founder based his argument on Tether’s latest audit, stating that the company’s investors are in the early stages of a large-scale trade focused on capital yield.
This is the exact composition of the reserves backing each USDT in circulation at the end of Q3 2025, according to an independent certification prepared by BDO Italia and issued by Tether on October 31, 2025.
Ardoino dismissed this analysis as a fear campaign (FUD) and said his stablecoin reserves of $181.5 billion provide a strong cushion.
The audit revealed that it held $9.856 billion in BTC and $12.92 billion in precious metals. The BitMEX co-founder warned: Capital could disappear from Tether if the combined value of gold and BTC falls by around 30%As reported by CriptoNoticias, USDT is theoretically insolvent, renewing doubts about its solvency, similar to those expressed by rating agency S&P Global last week.
This same scenario, a sustained decline in Bitcoin prices, is the only case in which another large institutional BTC holder, Strategy Inc., has acknowledged that it may be forced to liquidate some of its holdings. CEO Von Leh said the company would only sell Bitcoin “if the MNAV (adjusted net value per share) drops below 1 and there are no other financing options.” In other words, Strategy, the world’s largest Bitcoin holder, is only looking to sell its BTC in the event of extreme financial stress.
Coincidences are not trivial. Both Tether and Strategy have made Bitcoin a key part of their balance sheets in a high interest rate environment. Both believe that BTC prices will stabilize or rise once monetary policy is eased. But if this theory fails and Bitcoin enters an extended bear market (exactly the scenario Hayes is proposing for Tether), selling pressure could come not only from retail traders but also from the ecosystem’s two largest institutional holders.
Ardoino detailed that as of the end of Q3 2025, Tether had 7 billion in surplus capital on top of 181 billion in reserves, with an additional 23 billion in retained earnings added as part of its capital.
businessman Both Hays and S&P Global criticized the group for making the mistake of not taking this additional capital into account. Nor does it have $500 million in monthly base revenue generated solely from U.S. Treasury yields. This suggests that certain analyzes have an incentive to stifle competition.