BitMEX founder Arthur Hayes, commenting on Tether's latest audit report, argued that the company made a large interest rate assumption, posing a theoretical risk for USDT.
According to Hayes, audit data suggests that Tether believes the Fed will cut interest rates in the near term. Hayes noted that in this scenario, interest yields, a key source of Tether's income, would plummet, and that the company is aggressively accumulating gold and Bitcoin to mitigate this risk.
“The Tether team is just starting a big interest rate move. Reading the audit, I see they think the Fed will cut interest rates, which will crush their interest income. In response, they're accumulating gold and Bitcoin, which are expected to rise as the currency's value falls,” Hayes said.
Potential Vulnerabilities and Market Reactions
However, Hayes argues that this strategy carries significant vulnerability. If this portfolio of gold and Bitcoin loses approximately 30% of its value, Tether's equity could be completely wiped out, theoretically putting USDT at risk of bankruptcy. Therefore, he argued, large investors and exchanges would begin demanding real-time access to Tether's balance sheet.
Hayes also stated that traditional media will quickly pick up the discussion, saying, “Get your popcorn ready.” He also suggested that backlash against Howard Lutnick and Cantor Fitzgerald, the names behind Tether, could intensify.