Ex-Citi Analyst Claps Back at Hayes: Tether’s Financial Health Stronger Than Critics Claim

Arthur Hayes sounded the alarm—but this Wall Street veteran isn't buying it. A former Citi analyst just dropped a bombshell rebuttal to the Tether doomsayers.

Why the confidence? While crypto permabears hyperventilate about stablecoin reserves, insiders see a different picture. The numbers tell the story: $83B+ in assets backing USDT as of Q3 2025—no small feat for the 'unregulated shadow banking' critics love to hate.

Funny how traditional banks collapse every other Thursday while this 'risky' crypto instrument keeps humming along. Maybe the real systemic risk sits in legacy finance after all.

Hayes warns of interest-rate pressure, portfolio volatility

In a November 30 post, Hayes argued that Tether’s growing exposure to Bitcoin and gold indicates an underlying bet that U.S. Federal Reserve rate cuts are coming. Lower yields, he said, would reduce Tether’s substantial interest income from its U.S. Treasury holdings.

He also cautioned that market volatility could undermine the company’s equity cushion: “A roughly 30% decline in the gold + $BTC position WOULD wipe out their equity, and then USDT would be in theory insolvent.”

Hayes predicted that major USDT holders will demand greater real-time transparency and added that mainstream media coverage could accelerate pressure on Tether in the coming months.

Former Citi analyst: Hayes “missed a few key points”

Responding to Hayes, Joseph — who said he spent “100s of hours writing research on tether for @Citi” — pushed back on the insolvency narrative, arguing that Hayes misunderstood the nature of Tether’s disclosures and vastly underestimated its underlying corporate strength.

I spent 100’s of hours writing research on tether for @Citi. @CryptoHayes missed a few key points.

1) 𝐓𝐡𝐞𝐢𝐫 𝐝𝐢𝐬𝐜𝐥𝐨𝐬𝐞𝐝 𝐚𝐬𝐬𝐞𝐭𝐬 =/ 𝐚𝐥𝐥 𝐜𝐨𝐫𝐩𝐨𝐫𝐚𝐭𝐞 𝐚𝐬𝐬𝐞𝐭𝐬

When tether generates $ they have a separate equity balance sheet which they don’t… https://t.co/pHSRr245Up

Tether’s public reserves do not reflect its full balance sheet

Joseph emphasized that Tether’s published reserve breakdown is not the same as its full corporate asset base: “Their disclosed assets =/ all corporate assets.”

He explained that Tether maintains a separate equity balance sheet that includes equity stakes, mining operations, corporate reserves, and potentially more Bitcoin. These are not part of the public attestation because they sit outside the strict “matching” model used to show stablecoin backing.

“Highly Profitable” with billions in annual income

According to Joseph, the company’s profitability alone makes insolvency unlikely. With an estimated $120 billion invested in U.S. Treasuries yielding around 4% since 2023, he estimated Tether generates roughly $10 billion annually in liquid profit, with a lean workforce of around 150 employees.

Joseph argued this makes Tether “one of the most efficient cash generating businesses in the world.”

He added that the firm’s equity could be worth “$50–100bn,” and although Tether has reportedly explored a raise valuing the firm at $500 billion, he acknowledged such a valuation is likely unrealistic but still signals the scale of its asset base.

Better collateralized than banks, he says

Joseph also compared Tether’s reserves to U.S. banks, which typically hold only 5–15% of deposits in liquid assets.

While acknowledging that Tether lacks a central-bank backstop, he argued its collateralization practices are stronger and far more conservative than traditional fractional-reserve institutions.

His conclusion: Tether is nowhere NEAR insolvency.

Tether CEO Paolo Ardoino also responds: “FUD” and missing math

Tether CEO Paolo Ardoino entered the discussion as well, pointing to the company’s Q3 2025 attestation, which included a clearer statement on the company’s total equity position:

“Tether will continue to maintain a multi-billion-dollar excess reserve buffer and an overall proprietary Group equity approaching $30 billion.”

Ardoino said that at the end of Q3, Tether held approximately $7 billion in excess equity backing stablecoins, plus around $23 billion in retained earnings within the broader Tether Group.

He summarized the company’s balance sheet as: 

• Tether Group Total Assets: ~$215B
• Stablecoin Liabilities: ~$184.5B

He argued that several critics — including S&P — made the same mistake by ignoring the firm’s broader equity and its “~500M in monthly base profits generated by U.S Treasury yields alone.”

Ardoino attributed some of the criticism to rival incentives rather than genuine analysis: “Some influencers are either bad at math or have the incentive to push our competitors.”

He closed his post with a nod to Metallica: “Forever trusting who we are / No, nothing else matters.”

A familiar battle over transparency

The renewed debate underscores a recurring tension around Tether: its unmatched profitability and market dominance on one side, and ongoing questions about transparency, portfolio risk, and regulatory oversight on the other.

With more than $184 billion in stablecoins outstanding and a widening mix of investments, the company remains a focal point in crypto’s broader discussions about systemic risk and resilience.

Whether the market agrees with Hayes’ warning or Joseph’s confidence may ultimately depend on how interest rates MOVE and how much visibility Tether is willing to provide into the parts of its balance sheet it does not yet disclose publicly.

Also Read: Arthur Hayes Explains True Cause of the Oct 10 Crypto Crash