Arthur Hayes Warns Tether ‘Macro Hedge’ Risks Equity Wipeout in 30% Bitcoin Correction

BitMEX co-founder Arthur Hayes expressed concern that Tether's balance sheet faces insolvency risk if its Bitcoin and gold reserves experience a 30% drawdown. This critique stems from Tether's Q3 2025 attestation showing significant holdings in precious metals ($12.9 billion) and Bitcoin ($9.9 billion), which Hayes interprets as a 'macro hedge' against anticipated Federal Reserve rate cuts that would reduce income from its massive US Treasury bill portfolio. Hayes argues this strategy introduces asymmetric risk to Tether's thin equity layer, potentially leading to insolvency even if it remains operationally liquid. Conversely, industry stakeholders like Tran Hung argue that Hayes conflates balance sheet accounting with liquidity risk, pointing to Tether's $112.4 billion in US Treasury Bills and $21 billion in repo agreements as sufficient liquidity. Cory Klippsten noted Tether runs aggressive leverage (26x) with a small equity cushion, but suggested the risk is mitigated by the firm's high profitability and the owners' capacity to recapitalize after a recent $12 billion dividend withdrawal.

(Source：BeInCrypto)