Tether's Cash Backing | Concerns Rise Over 70% Support

A recent report from Galaxy Research has stirred the pot, revealing that only 70% of Tether's USDT is backed by cash equivalents. This raises significant concerns about the stability in the crypto market amidst increasing scrutiny.

Deeper Look at Tether's Finances

The report indicates that 66% of Tether's reserves are in treasuries, while a mere 3% is cash. The remaining 27% consists of loans and investments, which some commenters underscore as potentially risky. One financial commentator questioned, "Stable CDs are being swapped for riskier reverse repos. What's the plan?"

Notably, many people are expressing skepticism regarding Tether’s apparent refusal to undergo full audits. One comment pointed out, "It is the simplest business in the world to audit. Yet they refuse to get audited. Hmmmm."

Risk Profile Draws Scrutiny

Analysts have raised alarms about Tether's current financial strategy, noting that corporate investments and reverse repos comprise 20% of its total reserves. Both categories suffered declines of over 10% last quarter, prompting concerns about long-term viability.

Curiously, discussions on forums reflect a sentiment of caution and frustration. Many people are uneasy about Tether’s lack of transparency and what it means for stability in the broader market. "This is more than I thought," shared one commenter, highlighting the stark reality of Tether's financial backing.

Profitability Declines Alarmingly

Tether's profitability has nosedived, with a dramatic 78% fall from Q1 2024 to Q1 2025. This considerable drop has led observers to speculate about deeper issues within Tether's management. One user remarked, "That’s still way more than what I imagined they had."

Community Reactions and Concerns

Feedback from forums suggests a mix of emotions:

• Cautious outlook regarding Tether's risk management.

• Frustration around asset transparency.

• Skepticism about whether Tether will provide a legitimate audit.

Voices from the Community

• "Tether needs a clear plan. This isn't sustainable!"

• "Do you think tether is going to put out an audit via 'attestation' that doesn’t make them fully backed?"

Key Takeaways

• 🔍 66% of Tether’s reserves are in treasuries, 3% in cash.

• ⚠️ 20% tied up in high-risk corporate investments and reverse repos.

• 💔 78% drop in profits from Q1 2024 to Q1 2025.

As Tether navigates its challenging financial terrain, stakeholders are left to ponder: What strategies will Tether implement to ensure the stability of USDT?