S&P Global has made headlines by downgrading Tether’s USDt stablecoin rating to a “weak” score of 5 on its stability scale. This decision, announced on Wednesday, arises from apprehensions regarding Tether’s Bitcoin and gold reserves, which compose over 5% of the backing for USDt.
The ratings agency expressed concerns about what it termed the “opacity” surrounding Tether’s financial reports, which prompted the reassessment of their stablecoin. This downgrade comes at a time when Tether continues to hold significant assets, but the valuation methods and transparency of those assets are under scrutiny.
In a rebuttal, Tether’s CEO, Paolo Ardoino, firmly disputed the conclusions drawn by S&P Global, suggesting that the agency overlooked $7 billion in excess equity and approximately $23 billion in retained earnings. According to Ardoino, at the close of Q3 2025, Tether reported total assets of $215 billion countered against stablecoin liabilities of $184.5 billion, underscoring the company’s robust position despite external concerns.
Ardoino emphasized in a recent tweet, “Tether will continue to maintain a multi-billion-dollar excess reserve buffer and an overall proprietary Group equity approaching $30 billion.” He cautioned that the underreporting of Tether’s income potential—specifically the $500 million monthly profits generated from US Treasury yields—was a significant oversight in the downgrade.
Yet, amid Ardoino’s defenses, concerns linger. Notably, cryptocurrency analyst Arthur Hayes raised alarms regarding Tether’s balance sheet. He speculated that a 30% decline in Bitcoin and gold holdings could threaten the company’s equity position, cleverly summarizing that this could theoretically render USDt insolvent.
“The Tether folks are in the early innings of running a massive interest rate trade,” Hayes noted. His commentary indicates skepticism about how Tether is trying to manage potential losses from falling US Treasury yields by acquiring substantial amounts of gold and Bitcoin.
Additions to the conversation have come from critics including investor Jason Calacanis, who has suggested a radical shift for Tether. Calacanis advises that the company should divest its Bitcoin holdings entirely and focus solely on US Treasuries—a viewpoint that has sparked backlash from pro-Bitcoin advocates who argue against such a strategy.
Meanwhile, financial blogger Quoth the Raven has echoed calls for a comprehensive audit of Tether’s financial statements, questioning the company’s reluctance to provide transparency amidst heightened demand from investors and the market.
Despite the turbulence, Tether continues to report remarkable profits, exceeding $10 billion in the first nine months of 2025, aligning it with the performance of traditional financial behemoths like Goldman Sachs and Morgan Stanley. Operating on a stablecoin model pegged to the US dollar, Tether remains available for redemption, aiming to maintain trust within its user base.
As the crypto landscape evolves, the coming months are likely to be pivotal for Tether as it navigates the complexities of regulatory scrutiny and market pressures, all while striving to uphold its reputation and financial integrity.
