Tether Reserves | Only 70% of USDT Backed by Cash Equivalents
A recent report from Galaxy Research reveals that only 70% of Tether’s USDT is supported by cash and cash equivalent assets. This finding has sparked significant concern among people as profits decline and risk exposure grows.
Key Data from the Report
66% in Treasuries, 3% in Cash: Most of Tether's backing comes from treasuries, while cash makes up a minor part of its reserves.
Corporate Investments Stressed: Those represented a 20% risk factor, both declining over 10% from the previous quarter.
Profit Plunge: Tether reported a staggering 78% drop in profits from Q1 2024 to Q1 2025, revealing economic struggles.
"Stable CDs are being swapped out for riskier reverse repos," an industry observer noted, reflecting concerns over Tether’s investment strategies.
User Perspectives
Mixed feedback surrounds Tether's reserves in various forums. Many people demand greater transparency regarding Tether's financial practices and its refusal to undergo full audits.
Audit Demand: "This is more than I thought. It is the simplest business in the world to audit. Yet they refuse to get audited. Hmmmm," highlighted a commenter.
Historical Reference: A forum member recalled, "I remember back when bitcoin was ~$5k Here we are."
Skepticism About Transparency: Others pointed out: "It’s still not unbiased proof. They’ve never had a true audit by a big auditing firm."
Economic Implications
The implications of these findings could ripple through the crypto market. As Tether's reserves seem increasingly precarious, questions about USDT’s stability loom large. Will this impact people's confidence and lead them to reassess Tether’s reliability?
Key Insights
🔍 70% of USDT is cash-backed
📉 Profits plummeted by 78% in less than a year
⚠️ 20% risk from corporate investments and reverse repos
With rising scrutiny, Tether faces pressure to stabilize its standing in the market. The future of USDT remains uncertain as stakeholders seek clarity amid shifting financial strategies.