Arthur Hayes: Tether could face insolvency if gold, BTC drop 30%

BitMEX co-founder Arthur Hayes has warned that USDT issuer Tether could face insolvency if the value of its gold and Bitcoin holdings falls by approximately 30%. Hayes explained that Tether is increasing its holdings of these assets as a bet on U.S. interest rate cuts. However, he noted that based on an analysis of the company's latest audit report, a 30% drop in its gold and BTC positions would completely wipe out Tether's equity, creating a risk that could render USDT worthless. Hayes anticipates that large USDT holders and exchanges will likely demand real-time financial statements to assess Tether's solvency risk. He also predicted media pressure on the company's major shareholders, such as Howard Lutnick and Cantor Fitzgerald (CFAM).