Arthur Hayes has raised a sharp warning about Tether’s reserve strategy after reviewing the company’s latest attestation report. In a post on X, Hayes suggested that Tether is no longer just passively backing USDT with cash-like instruments, but is now taking a far more aggressive position; one that behaves like a large, leveraged macro trade hinging on Federal Reserve policy.
According to the report Tether shared, the company now holds more than $9.85 billion in Bitcoin and $12.9 billion in gold, which makes alternative assets a big portion of its balance sheet. Hayes argues this shift is deliberate. As he sees it, Tether expects the Federal Reserve to cut interest rates, a move that would sharply reduce the company’s income from U.S. Treasury bills and reverse repos, which currently generate billions per year in yield. With rates falling, the “price of money” would drop, and assets like Bitcoin and gold would likely rise. Tether appears to be positioning itself ahead of that pivot.
But Hayes warns the strategy works both ways. These assets introduce volatility into what is supposed to be the most stable balance sheet in crypto. Tether currently holds roughly $181 billion in assets backing USDT, yet its equity cushion is small compared to its Bitcoin and gold exposure. Hayes notes that a 30% drawdown in those holdings (something far from impossible in crypto markets) would wipe out Tether’s equity entirely. In traditional financial terms, this would render the entity “insolvent” on paper.
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
Hayes expects this risk dynamic to get attention from major exchanges, market makers, and institutional USDT holders, who may begin demanding real-time transparency on Tether’s balance sheet. If the market believes the company cannot absorb a sudden drop in risk assets, redemption pressure could grow, especially during volatile periods. That concern opens the door for mainstream media to revive long-standing skepticism about Tether’s reserves and governance. Hayes even suggests that outlets already critical of Cantor Fitzgerald and Howard Lutnick (key partners supporting Tether’s operations) may seize the moment to amplify the narrative.
Still, it’s important to note that Tether has historically weathered panic cycles without losing its peg, and its profits during periods of high interest rates have been enormous. The company’s strategy may be calculated rather than reckless; a way to hedge against future rate cuts before they impact revenues. Yet Hayes’ critique highlights a structural truth: the more Tether leans into volatile assets, the more it exposes itself to the same market swings USDT is supposed to protect users from.
For now, the peg is stable, liquidity remains deep, and demand for USDT continues growing. But if Bitcoin or gold enter a sharp correction, the solvency question Hayes raised could return to the forefront of market conversation. Whether this becomes a genuine risk or just another chapter in Tether skepticism may depend on how the company adjusts its positioning ahead of the next major Fed decision.
Read also: Hayes Dumped Pendle and Ethena at a Loss… Then Bought Back Cheaper: Here’s the Crypto Whale Playbook
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