Arthur Hayes believes Tether, the largest stablecoin issuer, is positioning for upcoming dovish Federal Reserve moves. Hayes pointed to rising gold and bitcoin as evidence, saying these assets would likely rally in a low‑interest‑rate scenario.
Arthur Hayes: Tether's Gold and BTC Hoarding Anticipates Major Interest-Rate Cuts
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Arthur Hayes: Tether Prepares For Low Interest Rate Scenario
The Facts
Arthur Hayes, former CEO of Bitmex, has addressed the latest attestation of Tether, one of the largest cryptocurrency companies in the industry.
According to Hayes, the configuration of assets in Tether’s balance sheet means that the company is preparing for an upcoming Federal Reserve dovish scenario, as several analysts predict for 2026.
Hayes stated that the increase in Tether’s bitcoin and gold holdings is part of a shift to maintain profitability as the Federal Reserve cuts rates, affecting the company’s inflows.
He explained:
How I read this audit is they think the Fed will cut rates which crushes their interest income. In response, they are buying gold and BTC that should in theory moon as the price of money falls.
Nonetheless, this could also have dire repercussions for USDT’s backing, as Hayes stated that “a roughly 30% decline in the gold + $ BTC position would wipe out their equity, and then USDT would be in theory insolvent.”
Why It Is Relevant
If Hayes’s assumptions are correct, with this move, Tether’s move puts part of USDT’s backup in jeopardy, allowing it to fluctuate as gold and BTC move according to market dynamics.
Nonetheless, Joseph Ayoubm, former Research Crypto Lead at Citi, stated that Hayes had missed a few things, claiming that this opinion was “highly misleading,” as Tether produced this attestation with a “matching” philosophy.
This means that Tether only discloses the assets backing the USDT issued, but it still holds other assets and investments that are not publicly disclosed. This undisclosed balance sheet would be composed of equity investments, mining operations, corporate reserves, and possibly more bitcoin, Ayoubm assessed.
Read more: Stablecoin Giant Tether Disputes S&P Rating Method After USDT Score Drop
Looking Forward
Tether’s balance sheet and the lack of a proper audit of its assets and holdings will create distrust among some, as the financial standing of a company that has issued over $180 billion in stablecoins is considered uncertain by some.
FAQ for Tether’s Recent Attestation
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What is the significance of Tether’s latest attestation?
Former Bitmex CEO Arthur Hayes suggests it indicates Tether’s preparation for an anticipated Federal Reserve rate cut in 2026. -
How are Tether’s asset holdings changing?
Tether is increasing its holdings in bitcoin and gold to maintain profitability amid potential interest income declines from Fed rate cuts. -
What are the risks associated with Tether’s asset strategy?
Hayes warns that a significant drop in gold and bitcoin prices could jeopardize USDT’s backing, leading to potential insolvency. -
What do experts say about Tether’s financial transparency?
Joseph Ayoub from Citi, argues that Tether’s disclosed assets are only part of a larger, undisclosed balance sheet, dispelling the concerns about its overall financial stability.
