Arthur Hayes: Tether’s Fed bet is risky, one misstep could nuke USDT

Arthur Hayes warned that Tether is running a risky interest rate trade that could threaten USDT solvency if markets move against the stablecoin issuer.
Summary

• Arthur Hayes says a 30% drop in Tether’s BTC and gold could erase its equity.
• Hayes argues the company’s interest-rate strategy may strain USDT solvency.
• Tether shuts Uruguay mining as reserves hit $181B dominated by U.S. Treasuries.

The BitMEX co-founder analyzed Tether’s latest attestation report and noted that a 30% decline in the company’s Bitcoin and gold holdings would wipe out equity.

The stablecoin issuer holds $9.86 billion in Bitcoin and $12.92 billion in precious metals according to its asset breakdown.

Hayes wrote on X that the company appears to be betting on Federal Reserve rate cuts, which would crush their interest income from U.S. Treasury bills and other fixed-income assets.

Hayes questions Tether’s balance sheet math

“The Tether folks are in the early innings of running a massive interest rate trade,” Hayes posted. “They are buying gold and BTC that should in theory moon as the price of money falls.”

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

The former BitMEX CEO calculated that a roughly 30% drop in combined gold and Bitcoin positions would eliminate Tether’s equity cushion. “Then USDT would be in theory insolvent,” he stated.

Hayes predicted that large USDT holders and exchanges will demand real-time balance sheet access to monitor solvency risks. “Get out your popcorn, I expect the MSM to run wild with this,” he wrote.

One X user defended Tether’s strategy, explaining that Bitcoin and gold purchases come from profits and excess reserves rather than newly issued USDT. “They only mint when there’s demand, and the BTC/gold allocations are made using the surplus they generate,” the user wrote.

Hayes questioned this explanation. “That was my assumption as well, but then why are their cash assets how they define them less than outstanding liabilities? What am I missing here?” he replied.

Tether shuts down Uruguay mining operations

In other Tether news, the stablecoin issuer confirmed it is closing its mining venture in Uruguay after electricity pricing negotiations failed.

The company is letting go of approximately 30 of its 38 staff members in the country as the business winds down.

The stablecoin issuer’s total reserves stand at $181.22 billion backing circulating tokens. U.S. Treasury bills comprise $112.42 billion of holdings, making up the largest asset category.

The company also holds $17.99 billion in overnight reverse repurchase agreements and $6.41 billion in money market funds.