S&P Global Slashes Tether USDt Rating: Bitcoin and Gold Reserves Spark Downgrade Drama

Another day, another rating agency tries to make sense of crypto.

The Stablecoin Shake-Up

S&P Global just handed Tether's USDt a downgrade. The reason? Its growing pile of Bitcoin and gold. The move sends a clear signal—traditional finance still views crypto collateral with deep suspicion, even when it's backing the very thing designed to bridge both worlds.

Reserves Under the Microscope

The agency's report highlights the inherent volatility of these assets. While gold might be the old guard's safe haven, Bitcoin's price swings remain a red flag for risk assessors clinging to spreadsheets. It's a classic clash: decentralized asset backing versus institutional comfort zones.

The Ripple Effect

This isn't just about one stablecoin. It pressures the entire concept of crypto-native reserves, potentially forcing issuers to pivot back towards boring old treasury bills to keep the suits happy. So much for innovation without permission.

In the end, it's a familiar story—finance's gatekeepers applying last century's rules to next-generation assets. They'll probably still charge you a hefty fee for the report, though.

TLDR

• S&P Global downgraded Tether’s USDt rating to “weak” on Wednesday, citing concerns about Bitcoin and gold reserves
• Tether CEO Paolo Ardoino said S&P failed to account for $7 billion in excess equity and $23 billion in retained earnings
• Tether reported $215 billion in total assets against $184.5 billion in stablecoin liabilities at the end of Q3 2025
• Analyst Arthur Hayes warned a 30% drop in Bitcoin and gold holdings could wipe out Tether’s equity
• Critics including Jason Calacanis called for Tether to sell its Bitcoin holdings and complete two independent audits

S&P Global downgraded Tether’s USDT stablecoin to its lowest rating on Wednesday. The ratings agency gave USDt a score of 5 on its stablecoin stability scale, marking it as “weak.”

The downgrade focused on concerns about Tether’s Bitcoin and gold reserves. Bitcoin now makes up more than 5% of the reserves backing USDt. S&P Global also cited what it called opacity in Tether’s financial reporting.

Tether CEO Paolo Ardoino pushed back against the downgrade. He said S&P Global made errors in its assessment of the company’s finances. Ardoino stated the ratings agency did not consider all of Tether’s assets and revenue streams.

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…

— Paolo Ardoino(@paoloardoino) November 30, 2025

According to Ardoino, Tether Group held $215 billion in total assets at the end of Q3 2025. The company’s stablecoin liabilities totaled $184.5 billion during the same period. He pointed to $7 billion in excess equity on top of the stablecoin reserves.

Ardoino also mentioned $23 billion in retained earnings as part of Tether Group equity. He said S&P Global ignored roughly $500 million in monthly profits generated from US Treasury yields alone. The CEO referenced Tether’s Q3 attestation report to support these figures.

Analysts Question Balance Sheet Strength

Arthur Hayes, founder of BitMEX exchange, speculated about Tether’s strategy. He suggested the company is buying large amounts of gold and bitcoin to offset income losses from falling US Treasury yields. Hayes warned that a steep price correction could create problems.

“A roughly 30% decline in the gold and BTC position WOULD wipe out their equity,” Hayes said. He added that such a scenario would theoretically make USDt insolvent.

The Tether folks are in the early innings of running a massive interest rate trade. How I read this audit is they think the Fed will cut rates which crushes their interest income. In response, they are buying Gold and $BTC that should in theory moon as the price of money falls.… pic.twitter.com/ZGhQRP4SVF

— Arthur Hayes (@CryptoHayes) November 29, 2025

Joseph Ayoub, former lead digital asset analyst at Citi, defended Tether’s position. He said he spent hundreds of hours researching the company during his time at Citi. Ayoub stated Tether has excess assets beyond what it reports publicly.

He described Tether as having an extremely profitable business model. The company generates billions in interest income with only 150 employees. Ayoub said Tether is better collateralized than traditional banks.

Calls for Audits and Asset Changes

Investor Jason Calacanis offered advice to Tether on social media. He urged the company to sell all its Bitcoin holdings. Calacanis also suggested Tether should only hold US Treasuries and complete two audits by American firms.

His comments drew criticism from Bitcoin supporters. They questioned why a stablecoin company should sell its Bitcoin for government bonds. Some pointed to Calacanis’ past support for bank deposit bailouts during the Silicon Valley Bank collapse in March 2023.

Financial blogger Quoth the Raven joined calls for an independent audit. He questioned why Tether refuses to provide a full audit when many people request one. The blogger said a lack of audit is typically not a positive sign.

Tether has earned more than $10 billion through the first nine months of 2025. This matches profit levels of major Wall Street firms like Goldman Sachs and Morgan Stanley. The company continues to operate its stablecoin, which remains pegged to the US dollar and available for redemption.