Tether’s Expanding Gold Strategy Draws Fresh Attention From Wall Street

Tether, the issuer of the USDT stablecoin, has been downgraded by S&P Global to the lowest rating of '5 (weak)' due to concerns over its asset disclosures and increasing exposure to high-risk investments, including Bitcoin and corporate bonds. This downgrade reflects ongoing scrutiny of Tether's financial practices and reserve management.

Tether has publicly disputed the methodology used by S&P Global Ratings following a downgrade of its stablecoin USDT, which has been attributed to the increasing risks associated with its exposure to falling Bitcoin prices. This downgrade has raised concerns regarding the stability of USDT's dollar peg and overall market confidence in the stablecoin.

S&P Global Ratings has downgraded Tether's USDt to its lowest stability rating, raising significant concerns about the stability of its dollar peg. Tether has responded by labeling the report as misleading, indicating a potential disconnect between the rating agency's assessment and the company's internal evaluations.

Tether has responded to S&P Global Ratings' downgrade of its stablecoin USDT to the lowest score, emphasizing its substantial assets, including $135 billion in Treasuries and $13 billion in profit, as well as its critical role in global payments.

Bitcoin's price surged past $90,000, driven by new Wall Street-backed cryptocurrency products, particularly from major financial players like BlackRock and JPMorgan. This significant price movement reflects a renewed interest in Bitcoin amidst a recovering market sentiment.

S&P Global has downgraded Tether's stability rating for its USDT stablecoin to the lowest level, citing concerns over reserve exposure and governance issues. This downgrade reflects growing apprehensions regarding Tether's financial practices and asset management, particularly in light of its increasing vulnerability to market fluctuations, especially in Bitcoin prices.

S&P Global Ratings has downgraded Tether's USDT, citing the increasing vulnerability of the stablecoin due to its rising exposure to Bitcoin, which has been experiencing significant price declines. This downgrade reflects concerns about the stability of USDT's dollar peg amid a volatile cryptocurrency market.

Tether has amassed a gold reserve of 116 tons, positioning itself alongside the reserves of small nations such as Korea and Hungary, according to a report by Jefferies. This significant accumulation accounts for nearly 2% of global gold demand in the last quarter, indicating Tether's aggressive market strategy.