BitMEX Founder Sounds Alarm: Tether’s Massive Bitcoin Gamble Could Trigger USDT Implosion
Arthur Hayes just threw a grenade into the stablecoin debate. The BitMEX co-founder warns that Tether's aggressive Bitcoin accumulation strategy isn't a sign of strength—it's a ticking time bomb for the entire crypto ecosystem.
The Core Contradiction
Stablecoins promise stability. They're the digital dollar proxies that power trillions in crypto trades. But Tether, the undisputed king with its USDT token, keeps stuffing its treasury with Bitcoin—the most volatile major asset on the planet. Hayes argues this creates a dangerous feedback loop. If Bitcoin's price tanks, the backing for the 'stable' coin weakens. Panic could spark a classic bank run in the digital age, collapsing the peg and vaporizing liquidity overnight.
A House of Cards Built on Volatility?
It's the ultimate crypto irony. The asset meant to tame Bitcoin's wild swings is now betting the farm on its success. Every new Bitcoin on Tether's balance sheet increases its exposure to a single, seismic market move. Critics call it a high-wire act without a net. Proponents see savvy treasury management. The truth? It's a massive, unhedged bet that makes traditional finance's risky derivatives look tame—and Wall Street bankers look like cautious accountants.
The Domino Effect No One Wants to See
A USDT de-peg wouldn't be an isolated event. It would send shockwaves through every exchange, DeFi protocol, and trading desk that relies on it for daily operations. Liquidity would freeze. The rush for exits could crash multiple asset prices simultaneously. Hayes's warning isn't just about one company's balance sheet; it's a stark reminder that in crypto, everything is connected—and sometimes, by the riskiest thread imaginable.
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…
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 toassets and
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
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 lowerin liquid assets compared to Tether’s overcollateralized structure.
His conclusion, “, quite the opposite;.“
S&P Downgrade Sparks Fierce Industry Backlash
Ardoino responded defiantly to S&P’s rating action and recurrent criticism of Tether’s operational model.
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
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.
