Tether Solvency Concerns Revisited: CoinShares Weighs In

CoinShares says Tether’s surplus reserves and strong profits reduce solvency risks despite Bitcoin and gold exposure.

6 December 2025, 16:32 published Updated 6 December 2025, 16:32

USDT Latest Attestation Sparks Solvency Debate

Tether (USDT) has once again found itself at the center of a debate over its financial health. On December 5, James Butterfill, head of research at CoinShares, published a market note suggesting that the latest solvency concerns surrounding the stablecoin “look misplaced.” He pointed to Tether’s most recent attestation, which indicates a surplus of assets over liabilities, arguing that the data does not signal systemic vulnerability at this time.

Solvency Debate Fueled by Hayes’ Warning

The latest round of criticism originates largely from Arthur Hayes, co-founder of BitMEX. Hayes recently warned that Tether’s growing exposure to Bitcoin and gold could expose the company to risks. He claimed that a roughly 30% dropin these assets might, in theory, eliminate Tether’s equity buffer, potentially rendering USDT “theoretically insolvent.”

This assertion quickly spread across crypto news platforms and social media, amplifying concerns among investors and analysts alike. However, CoinShares responded with a concise review of Tether’s current financial position.

Tether’s Latest Attestation Highlights Surplus and Profitability

According to the most recent attestation, Tether holds $181 billion in reserves against $174.45 billion in liabilities, producing a surplus of nearly $6.55 billion. CoinShares highlighted not only this surplus but also Tether’s exceptional profitability in 2025, noting year-to-date profits exceeding $10 billion.

“Tether is still one of the most profitable companies in the sector, generating $10 billion in the first three quarters of the year — an unusually high figure on a per-employee basis,” Butterfill wrote.

The attestation further breaks down Tether’s reserves: roughly $135 billion in U.S. Treasuries, $12.9 billion in gold, and $9.9 billion in Bitcoin. These figures provide transparency into the company’s holdings and clarify the composition of its reserves for both critics and market observers.

CoinShares: Strong Reserves and Profitability Reduce Solvency Risks

While acknowledging that stablecoins inherently carry certain risks, CoinShares argued that Tether’s robust surplus and profitability help mitigate near-term solvency threats. In other words, despite exposure to relatively volatile assets like Bitcoin and gold, the company’s overall financial position remains solid.

“The headline reserve-to-liability gap and unusually strong profits blunt the risks of near-term instability,” Butterfill noted.

This perspective provides a counterbalance to the warnings about potential exposure. CoinShares emphasizes that available data, for now, does not point to a systemic weakness in USDT’s structure.

Tether Faces Scrutiny from Multiple Angles

Hayes’ warning is not the only source of scrutiny. Tether CEO Paolo Ardoino recently criticized S&P Global for downgrading USDT’s ability to maintain its peg to the U.S. dollar. Ardoino labeled the downgrade as “Tether FUD” — shorthand for fear, uncertainty, and doubt — and defended the stablecoin using the company’s third-quarter attestation report.

S&P Global cited Tether’s exposure to “higher-risk” assets, including Bitcoin, gold, and certain loans, as the primary reason for its decision. Despite these concerns, USDT continues to dominate the stablecoin market, with $185.5 billion in circulation, accounting for nearly 59% of total stablecoin market share, according to CoinMarketCap.

Understanding the Risk vs. Reality

Tether’s financial architecture combines a mix of low-risk assets such as U.S. Treasuries with higher-risk holdings like gold and Bitcoin. While exposure to volatile assets naturally invites scrutiny, CoinShares argues that the stablecoin’s substantial surplus and profitability provide a buffer against extreme market fluctuations.

“The available data does not, at present, indicate systemic vulnerability for USDT,” Butterfill concluded.

This assessment underlines the importance of separating speculative concerns from the firm’s fundamental financial health. Although critics highlight the potential for short-term turbulence, the long-term picture reflects a company with substantial reserves and a profitable operation.

Market Reactions and Media Coverage

The recent debate surrounding Tether illustrates how quickly solvency concerns can spread in the cryptocurrency ecosystem. Hayes’ warning went viral across social media and news outlets, sparking widespread discussion. Analysts and media coverage often juxtapose Tether’s reported reserves against its market dominance, creating a dynamic conversation about stablecoin stability and investor confidence.

Despite these challenges, Tether remains the largest stablecoin by market capitalization, with a substantial lead over competitors. Its continued circulation and market share underscore the broader market’s reliance on USDT as a primary medium of exchange and liquidity provider in the crypto space.

Tether’s Position Remains Strong

While exposure to Bitcoin and gold has drawn scrutiny, Tether’s latest attestation, combined with record profitability, paints a picture of a stablecoin with a solid reserve cushion. CoinShares’ analysis emphasizes that current data do not point to systemic solvency risks, even as discussions about potential market shocks continue.

In the rapidly evolving world of cryptocurrency, Tether’s financial disclosures and ongoing market presence highlight the delicate balance between perceived risk and actual financial stability. By maintaining transparency through attestations and reporting, Tether provides market participants with critical insights into the composition and strength of its reserves.