BitMEX co-founder Arthur Hayes argues that Tether is positioning itself for an upcoming Fed rate-cut cycle by shifting a greater share of its reserves into Bitcoin and gold.

Hayes wrote on X on Saturday that Tether’s most recent attestation suggests the firm is preparing for a rate-cut environment, which would reduce returns on Treasuries but could drive up the price of Bitcoin and gold.

However, the analyst cautioned that a sharp decline in those riskier assets could strain Tether’s equity cushion and reignite long-running questions about USDT’s solvency.

The Tether folks are in the early innings of running a massive interest rate trade. How I read this audit is they think the Fed will cut rates which crushes their interest income. In response, they are buying gold and $BTC that should in theory moon as the price of money falls.… pic.twitter.com/ZGhQRP4SVF

— Arthur Hayes (@CryptoHayes) November 29, 2025

According to the latest reserve report, Tether holds around $181 billion in assets to back USDT. The bulk of this is in cash and liquid securities, including Treasury bills, repo, and money market instruments.

Other holdings include nearly $13 billion in precious metals, close to $10 billion in Bitcoin, and more than $14 billion in secured loans, along with several smaller investment categories.

Tether was recently assigned a “weak” stability rating by S&P Global Ratings after boosting its holdings of riskier assets, including Bitcoin, within its reserves. S&P noted that this approach increases the likelihood of undercollateralization in the event of heightened crypto market stress.

In response, Tether said the S&P’s rating framework is outdated and does not reflect the scale of its daily settlement flows.