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Arthur Hayes has suggested that Tether is in the early stages of a large-scale interest rate trade, betting that the price of Bitcoin and gold will rise even though a Fed rate cut will hurt Treasury revenue. He argues that a significant decline in Bitcoin and gold positions could wipe out Tether’s stock.
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BitMEX co-founder Arthur Hayes claims that Tether is preparing for the upcoming Fed rate cut cycle by moving a larger percentage of its reserves into Bitcoin and gold.
Hayes wrote in X on Saturday that Tether’s latest testimony suggests the company is bracing for a lower interest rate environment, which would reduce returns on U.S. Treasuries but could boost Bitcoin and gold prices.
However, analysts warned that a sharp decline in these risky assets could weigh on Tether’s equity cushion and reignite long-standing questions about USDT’s solvency.
The folks at Tether are in the early stages of a large interest rate deal. My reading of this audit is that they are considering a Fed rate cut that will crush interest income. In response, they are buying gold and Bitcoin (BTC), which should theoretically cause the prices of the currencies to fall. … pic.twitter.com/ZGhQRP4SVF
— Arthur Hayes (@CryptoHayes) November 29, 2025
According to the latest preliminary report, Tether holds approximately $181 billion in assets to support USDT. Most of this is cash and liquid securities such as Treasury bills, repos, and money market instruments.
Other holdings include nearly $13 billion in precious metals, nearly $10 billion in Bitcoin, more than $14 billion in secured loans, and several smaller investment categories.
Tether was recently given a “weak” stability rating by S&P Global Ratings after increasing its holdings in risky assets such as Bitcoin within its reserves. S&P noted that this approach increases the likelihood of collateral shortages in the event of increased stress in the crypto market.
In response, Tether said S&P’s rating framework is outdated and does not reflect the scale of daily payment flows.
