Tether (USDT), the most prominent stablecoin in the cryptocurrency space, claims to have a robust financial standing. According to recent attestations, Tether has around $7 billion in excess reserves and an equity buffer close to $30 billion. They report earning $10 billion in revenue for the first three quarters of 2025 and receiving $500 million monthly from U.S. Treasury yields. Executives at Tether have dismissed fears of insolvency as mere "Tether FUD" (Fear, Uncertainty, Doubt).
But should we trust their claims? Analysts, including those from S&P Global, have raised concerns about the composition of Tether's assets. Their reserves consist of volatile assets such as Bitcoin and gold, which could compromise their dollar peg if the market were to decline. Bitcoin alone makes up approximately 5.6% of USDT in circulation, surpassing the overcollateralization margin of 3.9%. If these assets were to lose substantial value, Tether could find itself in a precarious position.
How Did the Market Respond to Tether's Claims?
