Arthur Hayes warns Tether’s Bitcoin and gold bet exposes it to major downside risk

S&P Global Ratings has downgraded Tether's USDT stablecoin to its lowest stability rating, citing concerns over its increasing exposure to Bitcoin and governance issues. This downgrade has sparked a significant online backlash, with Tether asserting its financial strength and criticizing the rating methodology used by S&P.

Bolivia's government has made a significant move by integrating stablecoins, particularly USDT, into its banking system, allowing them to be used as legal tender. This decision is aimed at modernizing the financial landscape and enhancing economic stability in the country.

Arthur Hayes, co-founder of BitMEX, has asserted that the cryptocurrency market is compelling traditional finance (TradFi) to evolve, particularly with the rise of equity perpetual contracts expected to dominate trading in 2026. He emphasizes that the integration of crypto into mainstream finance is no longer optional for traditional institutions.

Ethereum ETFs experienced significant outflows totaling $1.4 billion in November, reflecting a retreat by investors amid increasing caution and volatility in the cryptocurrency markets. This trend indicates a growing wariness among investors regarding the stability of Ethereum as a viable investment option.

Arthur Hayes, co-founder of BitMEX, has reaffirmed his bullish stance on Bitcoin, maintaining a price target of $250,000 by year-end, while stating that the recent dip to $80,600 represents the market's bottom. He expressed these views during an appearance on the Milk Road podcast, emphasizing that dollar liquidity has reached its lowest point and is now poised to support higher prices for Bitcoin.

Arthur Hayes, co-founder of BitMEX, has stated that most Layer 1 (L1) cryptocurrencies outside of Ethereum and Solana are likely to decline significantly, potentially heading towards zero. This assertion highlights concerns about the sustainability and viability of numerous blockchain projects in the current market landscape.

BlackRock's Bitcoin ETF has recorded $114 million in net outflows amid ongoing market volatility, reflecting a cautious stance from investors as they navigate the uncertain cryptocurrency landscape. This trend follows a series of significant withdrawals from the fund, indicating a potential shift in institutional investment strategies.

Arthur Hayes has issued a warning regarding Monad, predicting that its token could experience a drastic decline of up to 99% due to its vulnerable structure, which he describes as a high-risk 'VC coin'. This caution comes amidst a backdrop of significant market fluctuations and concerns over liquidity.