Tether has changed its reserve strategy by reducing Treasury exposure and increasing its Bitcoin and gold reserves. The USDT issuer has decreased reliance on government debt and increased its weight in strong, sovereign, and lasting assets.
According to Cryptosrs, Tether has reduced its U.S. Treasury holdings and increased its Bitcoin and gold reserves — and all of this is being seen as a quiet preparation for the upcoming Federal Reserve (FED) rate cut.
According to Arthur Hayes, the founder of BitMEX, the latest reserve report from Tether indicates that the company is moving away from U.S. Treasuries towards assets like Bitcoin and gold, indicating a macro-level shift.
According to S&P Global, Tether is now investing in more volatile assets, which could pose a risk to USDT in times of market distress. Tether's S&P rating is still low.
On the other hand, Tether's CEO Paolo Ardoino disagrees. He claims that the company has no "risky assets" and its rapid growth is evidence that the world is moving towards a non-banking financial system.
⭐ Why is breaking Tether not so easy?
Crypto expert Ted Pillows has also commented on the spreading FUD regarding Tether. The company's latest attestation shows that Tether has increased its holdings of gold and Bitcoin due to declining interest income — and this is raising concerns among people.
If these risky assets drop by 30%, Tether's equity cushion could be wiped out, increasing the possibility of insolvency and panic in the market.
But Ted says that Tether has endured ten years of FUD and USDT is still holding at $1.00.
Just like banks, they also operate on fractional reserves:
As long as redemptions remain reasonable, the system works. The problem only arises when unreasonable panic creates liquidity stress.
According to Ted, USDT is backed by U.S. Treasuries, yield-generating assets, and to some extent, risky assets — and that's what has brought it to a $174 billion stablecoin empire.
Ted says:
"If someone wants to destroy USDT, they can, but the chances are extremely low."
