Key Takeaways:
- Tether CEO's response to S&P's downgrade of USDT.
- Emphasis on Tether's strong asset base and revenue generation.
- Discussion of Arthur Hayes' analysis and contrasting view from Joseph Ayoub.
Introduction:
Tether CEO Paolo Ardoino and market analysts have challenged S&P Global's decision to downgrade USDt's (USDT) ability to maintain its US dollar peg. They argue that the ratings agency failed to fully account for Tether's total assets and revenue streams.
Tether's Response to the Downgrade:
According to Ardoino, Tether Group's total assets at the end of Q3 2025 amounted to approximately $215 billion, while its total stablecoin liabilities were around $184.5 billion. Referencing Tether’s Q3 attestation report, he stated, "Tether had, at the end of Q3 2025, about $7 billion in excess equity, on top of the about $184.5 billion in stablecoin reserves, plus about another $23 billion in retained earnings as part of our Tether Group equity. S&P made the same mistake of not considering the additional Group Equity, nor the roughly $500 million in monthly base profits generated by US Treasury yields alone."
S&P's Analysis and its Impact:
S&P Global downgraded USDt’s dollar-peg rating to “weak” on Wednesday, the lowest score on its scale. This prompted concern and skepticism among some analysts regarding the company, which has become a crucial component of the cryptocurrency market infrastructure.
Arthur Hayes' Analysis and Rebuttals:
Arthur Hayes, a market analyst and founder of the BitMEX crypto exchange, has speculated that Tether is purchasing large quantities of gold and BTC to offset income shortfalls caused by decreasing US Treasury yields. He suggested that as the Federal Reserve cuts interest rates, the value of gold and BTC should increase. However, he cautioned that a significant correction in these assets could pose a threat to Tether's financial stability. "A roughly 30% decline in the gold and BTC position would wipe out their equity, and then USDt would be, in theory, insolvent," Hayes said.
Joseph Ayoub's Counter-Argument:
Joseph Ayoub, the former lead digital asset analyst at Citi, refuted Hayes’ analysis, stating that he spent “hundreds” of hours researching Tether during his time at the financial institution. Ayoub argued that Tether possesses excess assets beyond what it publicly reports, operates an extremely profitable business that generates billions of dollars in interest income with a relatively small workforce of 150 employees, and is better collateralized than traditional banks.
Conclusion:
The debate surrounding the safety and stability of USDT continues. The Tether team defends their business model, while external analysts scrutinize their ability to maintain the dollar peg amid changing market conditions.
EN
