Tether Rebuts S&P ’Weak’ USDT Rating — Cites $7B Equity, $23B Retained Earnings and $500M Monthly Treasury Income
S&P Global downgraded USDT’s peg-stability rating to “weak,” citing reserve composition and conservative treatment of volatile assets. Tether CTO Paolo Ardoino immediately disputed the rating, saying S&P ignored key balance-sheet items in Tether Group’s Q3 2025 attestation: about $215 billion in total assets versus roughly $184.5 billion in stablecoin liabilities (implying ~ $7 billion in excess equity), ~ $23 billion in retained earnings, and an estimated ~$500 million in monthly base profits generated by US Treasury yields. S&P flagged holdings such as gold and Bitcoin as risk factors; market commentators diverged. Former BitMEX CEO Arthur Hayes warned that a material drop (~30%) in Tether’s gold/BTC allocations or in yield income could erode equity and threaten USDT’s solvency. Ex-Citi analyst Joseph Ayoub countered that Tether is highly profitable and better collateralised than many banks, and may hold excess assets beyond reported figures. For traders: expect short-term volatility around stablecoin flows, liquidity and on‑chain USDT movements as market participants reassess reserve risk. Monitor future attestations, shifts in Tether’s disclosed reserve mix (treasuries vs. gold/BTC), Treasury yield trends, and regulatory commentary — these are the primary drivers that could change USDT liquidity conditions and peg stability. Primary keywords: USDT, Tether, S&P Global, stablecoin reserves, Treasury yields.
Neutral
The news creates short-term uncertainty but does not present concrete evidence of an imminent USDT peg break. S&P’s downgrade increases perceived counterparty/reserve risk and may drive short-term outflows or rebalancing by traders, which can cause volatility in USDT supply and temporary pressure on the peg. However, Tether’s public attestation figures—$215B assets, $184.5B liabilities, ~$7B excess equity, ~$23B retained earnings and ~$500M monthly Treasury-derived profit—support a materially collateralised position. Divergent analyst views (warnings about gold/BTC exposure versus assertions of strong profitability and excess assets) mean the market reaction will depend on follow-up disclosures, changes in reserve composition, and Treasury yield movements. In the short term, expect increased volatility, higher monitoring of on‑chain USDT flows, and potential transient liquidity premia on USDT. In the medium-to-long term, unless attestations reveal sustained reserve shortfalls or regulatory intervention occurs, USDT’s peg is likely to remain intact, making the overall price-directional impact on USDT itself limited. Thus the immediate market classification is neutral: higher volatility risk without clear directional downside.