Is USDT Safe? Battle of Opinions Between Hayes and Butterfill

Jakarta, Pintu News – Tether , a stable cryptocurrency, continues to dominate the market despite the ongoing controversy over its financial reserves.

Despite ongoing concerns, USDT remains the top choice in crypto transactions, with transaction volume reaching $719.83 billion in November. The big question that arises is, why is confidence in USDT getting stronger amidst the issues?

Will there be a downturn?

James Butterfill, Head of Research at CoinShares, recently defended Tether by pointing out a recent report that showed a surplus of assets compared to liabilities. According to Butterfill, concerns about Tether’s solvency appear to be unfounded and do not indicate systemic vulnerability.

The report shows that Tether has total assets of about $181 billion compared to liabilities that amount to about $174.45 billion, providing an equity buffer of almost $6.55 billion. Arthur Hayes, founder of BitMEX, raised a different concern.

He argued that Tether was “interest rate trading” by increasing exposure to riskier assets such as Bitcoin and gold. Hayes suggested that a sharp 30% drop in the value of those two assets could theoretically wipe out Tether’s entire equity buffer, making it “theoretically insolvent”.

Also Read: 5 Important Facts from Bitcoin’s (BTC) Latest Prediction: US$125,000 Target?

Teter Shows Significant Resilience

Despite Hayes’ concerns, Tether has shown significant resilience to market fluctuations. Most of Tether’s reserves are made up of liquid assets such as US Treasuries which are worth around $135 billion. The rest, which includes around $12.9 billion in gold and $9.9 billion in Bitcoin, does add to the risk of volatility as feared by Hayes.

However, CoinShares noted that the large gap between reserves and liabilities offset the risk. They also added that Tether’s high profitability this year further strengthens its financial position. This shows that despite the theoretical risks Hayes revealed, Tether still shows solid financial strength in practice.

USDT Utility and Dominance

The market seems to prefer USDT’s unrivaled utility and dominance, which is evident from the monthly volume of $719 billion, compared to the regulatory and theoretical risks associated with its reserves.

The real long-term challenge for Tether is not from a single 30% drop in assets, but rather from the mass panic that forced Tether to fulfill a $34 billion redemption without enough cash or equivalents.

As long as there is no fully transparent and liquid competitor that can match Tether’s functional dominance in global crypto settlement, USDT will continue to serve as the unwavering king of the crypto world.

Conclusion

All things considered, market confidence in Tether (USDT) is likely to remain strong as long as there are no more transparent and liquid alternatives. Despite the ongoing debates, USDT’s functional prominence in the global crypto ecosystem is undeniable.

Also Read: 10 Ways to Learn Crypto from Zero: Basic Guide to Start Investing Safely

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FAQ

Q1: What is Tether (USDT)?

A1: Tether (USDT) is a stable cryptocurrency that aims to maintain a value equivalent to one US dollar, so it is often used as a medium of exchange or store of value in the crypto ecosystem.

Q2: Why is Tether (USDT) often the subject of controversy?

A2: Tether (USDT) is often the subject of controversy due to concerns about its financial reserves and whether it is truly backed by US dollars in a 1:1 ratio, as well as its asset management involving risky assets such as Bitcoin (BTC) and gold.

Q3: What was the transaction volume of Tether (USDT) in November?

A3: In November, Tether (USDT) recorded an on-chain transaction volume of $719.83 billion, demonstrating its dominance in the crypto market.

Q4: What is the “interest rate trading” that Tether is accused of?

A4: The “interest rate trading” Tether is accused of refers to their investment strategy of increasing exposure to riskier assets such as Bitcoin (BTC) and gold, which could be risky in the event of a significant decline in the value of these assets.

Q5: What impact did the mass panic have on Tether (USDT)?

A5: A mass panic could force Tether (USDT) to fulfill massive redemptions that it may not be able to handle quickly if it does not have enough cash or liquid assets, which could threaten its financial stability.

Reference

• AMB Crypto. Is USDT Safe? Inside Hayes vs Butterfill’s Battle Over Tether’s Solvency. Accessed on December 8, 2025