New worries about Tether's financial stability resurfaced this week after market commentator Arthur Hayes warned that the world's largest issuer of stablecoins could be in trouble if the value of its reserves falls.
But CoinShares' head of research, James Butterfill, rejected the narrative, calling the latest wave of fears "misplaced" and pointing to unusually strong financial bearings.
Tether's latest statement shows $181 billion in reserves against about $174.45 billion in liabilities, with a surplus of almost $6.8 billion. According to Butterfill, the numbers do not support the notion that the company is on the verge of collapse.
"While the risks associated with stablecoins should never be completely ignored, the current data does not indicate systemic vulnerabilities," he wrote.
Surplus and revenues indicate solidity
Far from the headlines, Tether continues to generate exceptional revenues. The company earned about $10 billion in the first three quarters of the year, making it one of the most profitable crypto companies per employee.
The surplus is important because it provides a cushion. Although Tether's reserves include volatile assets such as Bitcoin and gold, a point critics insist on, the size of revenues and retained capital indicate that the issuer is not in trouble.
The stablecoin remains dominant, with about $185.5 billion in circulation and nearly 59% market share. Its scale gives it an advantage: redemptions can be absorbed more easily and the balance sheet can support fluctuations that smaller players could not handle.
Why critics are concerned about Tether's USDT
The latest wave of anxiety started with Arthur Hayes, who argued that a 30% drop in Bitcoin and gold reserves would "wipe out their capital" and make USDT technically insolvent. He described Tether as being "in the early innings of running a massive interest rate trade".
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
S&P Global has aggravated concerns by lowering USDT's stability rating, citing exposure to gold, Bitcoin, loans and other assets outside of traditional cash and Treasuries. The rating agency said that these assets introduce a risk of increased volatility during periods of market stress.
Tether CEO Paolo Ardoino dismissed the downgrade as "FUD on Tether", pointing to the official statement showing high reserves.
The debate is about risk, not mathematics
Both sides agree on the numbers. The disagreement is about what would happen if the markets collapsed.
Tether currently holds more assets than liabilities. This is a fact. Supporters say the surplus, solid revenues and huge scale make insolvency unlikely.
Sceptics retort that the real issue is liquidity risk, not just solvency. A rapid and deep drop could force the sale of assets at the wrong time.
For now, the company appears stable, profitable and well capitalised. But as long as Bitcoin, gold and loans remain part of its reserves, the debate about how much of a buffer is enough will continue.
