CoinShares dismisses new concerns over Tether's solvency after Arthur Hayes' warning

CoinShares has dismissed renewed concerns over Tether’s ability to meet its USDT obligations following Arthur Hayes’ warning that a sharp drop in Bitcoin and gold prices could render the stablecoin “insolvent.” According to CoinShares, Tether’s latest report shows $181 billion in reserves compared to $174.45 billion in obligations, representing a $6.55 billion surplus and over $10 billion in profits year-to-date — not indicative of systemic risk.

Hayes argued that Tether’s increasing allocation to Bitcoin and gold could make the company more susceptible to volatility, and a 30% drop in these two assets could wipe out its equity. However, CoinShares believes that strong profits and a reserve surplus help mitigate this risk.

Tether is also facing a potential downgrade from S&P Global due to its exposure to high-risk assets. Nevertheless, USDt remains the largest stablecoin on the market, with over $185 billion in circulation.