Tether, the issuer of USDThas long been considered one of the most stable assets in the crypto market, but recent reports suggest that: Bitcoin price crash This could threaten the solvency of stablecoins. Arthur Hayes, co-founder and chief information officer (CIO) of BitMEX, revealed that a portion of USDT reserves are allocated to BTC, which could expose it to increased market volatility.
Bitcoin price collapse threatens Tether USDT stability
In a recent report share Earlier this week on X, Hayes outlined market risks that could have a devastating impact on Tether’s USDT. The BitMEX founder explained that the stablecoin issuer is executing large interest rate trades, likely betting on profits. Federal Reserve (FED) rate cut.
He said stablecoin issuers: Accumulate significant positions in Bitcoin and gold to hedge against reduced interest income. As a result, Hayes warned that if Tether’s gold and Bitcoin positions were to decline by around 30%, the entire stock could disappear, theoretically putting USDT at risk. bankruptcy.
The cryptocurrency’s founder said a significant drop in Tether’s reserves could cause panic among people, as stablecoins are usually backed by the US dollar. USDT holder and a cryptocurrency exchange. Such a scenario could require immediate insight into a stablecoin issuer’s balance sheet to assess solvency risk. Hayes also suggested that mainstream media could further amplify concerns and cause widespread alarm in the market.
Analyst refutes Hayes’ USDT claim
Tether’s USDT has come under scrutiny following Hayes’ comments on X, with crypto analysts debating the resilience of its reserves. Joseph Ayoub, former Citi Research Leader, said: challenged Hayes argues that even if the prices of Bitcoin and gold crash by 30%, the chances of USDT going bankrupt are still extremely low.
he emphasized that BitMEX Co-Founder His post missed three important points. Ayoub pointed out that Tether is publicly available. disclosed Assets do not represent the entirety of a company’s assets. According to him, when Tether issues USDT, it maintains a separate equity balance sheet. not announced. The reserve figures ultimately disclosed are intended to show how USDT is backed. At the same time, the company maintains its balance sheet. stock investmentmining operations, corporate reserves, likely more Bitcoin, and the rest distributed as dividends to shareholders.
Ayub also explained Tether’s core business is highly profitable And efficient. He said the company owns more than $100 billion in interest-bearing government bonds and generates about $10 billion in annual liquid profits while operating a relatively small team. A former Citi research chief estimates that the value of the stablecoin issuer’s equity is likely between $50 billion and $100 billion, which would provide a substantial buffer against the company’s losses. Virtual currency and gold holdings.
Finally, Ayub revealed that Tether operates like a traditional bank, keeping only 5-10% of deposits in liquid assets, with the remaining 85% held in long-term investments. He also pointed out that stablecoin issuers have much better collateral than banks. ability to print moneyBankruptcy is virtually impossible.
Featured image from Shutterstock, chart from Tradingview.com
