The post Is Tether’s Stability at Risk? S&P Downgrades USDT Amid BTC appeared on BitcoinEthereumNews.com. S&P Global Ratings has downgraded Tether’s USDT, citing concerns over its exposure to volatile assets like Bitcoin. The agency warned that a drop in Bitcoin’s value could undermine the collateral backing USDT and affect its stability. S&P Downgrades Tether Over Reserve Concerns The ratings firm cut back its score for Tether from “constrained” to “weak.” This adjustment reflects increased risks pertaining to the reserve mix of the company. The company has a ton of risky assets: Bitcoin, gold, corporate bonds and secured loans. The platform has not completely disclosed the details of its reserves, S&P pointed out. It has always done so through attestations instead of a full audit. Nonetheless, platform maintains its reserves are sound and that they are supported by safe assets like U.S. Treasury bills. As per its transparency report the company hold above 87,728 BTC. Bitcoin currently comprises 5.4% of the platform’s total reserves, compared to 3.6% in its previous report. This surge has led to fears that a rapid fall in the value of Bitcoin would shrink coverage on Tether’s reserves. Platform’s Reserve Strategy Under Scrutiny Amid Bitcoin Exposure The current market value of USDT is about $184 billion, and the Bitcoin holding constitutes some part of its total reserve. In a report, S&P analysts Rebecca Mun and Mohamed Damak, said that USDT could become undercollateralized if there is a large decline in the Bitcoin price. This would impinge on the stablecoin’s ability to hold its peg with the dollar. The company spreads its reserves across lower-risk assets. It claims to be the 17th largest holder of U.S. Treasury bills globally, emphasizing its focus on securing a strong foundation for USDT. It has also has some high-risk assets on its balance sheet. The reserves are about 8% collateralized with secured lending, none of which is related party, it said. S&P warned… The post Is Tether’s Stability at Risk? S&P Downgrades USDT Amid BTC appeared on BitcoinEthereumNews.com. S&P Global Ratings has downgraded Tether’s USDT, citing concerns over its exposure to volatile assets like Bitcoin. The agency warned that a drop in Bitcoin’s value could undermine the collateral backing USDT and affect its stability. S&P Downgrades Tether Over Reserve Concerns The ratings firm cut back its score for Tether from “constrained” to “weak.” This adjustment reflects increased risks pertaining to the reserve mix of the company. The company has a ton of risky assets: Bitcoin, gold, corporate bonds and secured loans. The platform has not completely disclosed the details of its reserves, S&P pointed out. It has always done so through attestations instead of a full audit. Nonetheless, platform maintains its reserves are sound and that they are supported by safe assets like U.S. Treasury bills. As per its transparency report the company hold above 87,728 BTC. Bitcoin currently comprises 5.4% of the platform’s total reserves, compared to 3.6% in its previous report. This surge has led to fears that a rapid fall in the value of Bitcoin would shrink coverage on Tether’s reserves. Platform’s Reserve Strategy Under Scrutiny Amid Bitcoin Exposure The current market value of USDT is about $184 billion, and the Bitcoin holding constitutes some part of its total reserve. In a report, S&P analysts Rebecca Mun and Mohamed Damak, said that USDT could become undercollateralized if there is a large decline in the Bitcoin price. This would impinge on the stablecoin’s ability to hold its peg with the dollar. The company spreads its reserves across lower-risk assets. It claims to be the 17th largest holder of U.S. Treasury bills globally, emphasizing its focus on securing a strong foundation for USDT. It has also has some high-risk assets on its balance sheet. The reserves are about 8% collateralized with secured lending, none of which is related party, it said. S&P warned…

Is Tether’s Stability at Risk? S&P Downgrades USDT Amid BTC

S&P Global Ratings has downgraded Tether’s USDT, citing concerns over its exposure to volatile assets like Bitcoin. The agency warned that a drop in Bitcoin’s value could undermine the collateral backing USDT and affect its stability.

S&P Downgrades Tether Over Reserve Concerns

The ratings firm cut back its score for Tether from “constrained” to “weak.” This adjustment reflects increased risks pertaining to the reserve mix of the company. The company has a ton of risky assets: Bitcoin, gold, corporate bonds and secured loans.

The platform has not completely disclosed the details of its reserves, S&P pointed out. It has always done so through attestations instead of a full audit. Nonetheless, platform maintains its reserves are sound and that they are supported by safe assets like U.S. Treasury bills.

As per its transparency report the company hold above 87,728 BTC. Bitcoin currently comprises 5.4% of the platform’s total reserves, compared to 3.6% in its previous report. This surge has led to fears that a rapid fall in the value of Bitcoin would shrink coverage on Tether’s reserves.

Platform’s Reserve Strategy Under Scrutiny Amid Bitcoin Exposure

The current market value of USDT is about $184 billion, and the Bitcoin holding constitutes some part of its total reserve. In a report, S&P analysts Rebecca Mun and Mohamed Damak, said that USDT could become undercollateralized if there is a large decline in the Bitcoin price. This would impinge on the stablecoin’s ability to hold its peg with the dollar.

The company spreads its reserves across lower-risk assets. It claims to be the 17th largest holder of U.S. Treasury bills globally, emphasizing its focus on securing a strong foundation for USDT.

It has also has some high-risk assets on its balance sheet. The reserves are about 8% collateralized with secured lending, none of which is related party, it said. S&P warned that this combination could make the company more susceptible to further risks.

In a recent X post, Paolo Ardoino, wrote in response to the S&P’s downgrade of Tether and stated, “We wear your loathing with pride.

Ardoino emphasized that the traditional financial rating counterparts he claimed had caused great losses for investors over the years. He said these older models did not reflect the actual risk of many companies that had defaulted despite getting high ratings.

Ardoino stressed that Tether now operates the world’s first overcapitalized financial firm that doesn’t have “toxic reserves”. He added that Tether is still “extremely profitable” despite its traditional finance pitfalls. He underscored that the success of Tether signals a need for an alternative financial model.

Source: https://coingape.com/is-tethers-stability-at-risk-sp-downgrades-usdt-amid-btc/

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