🚨 Tether’s Core Risk: Limited Redemption Capacity Exposed.
Tether’s $USDT primary vulnerability remains its constrained ability to handle large-scale redemptions, risking a liquidity crisis if fiat outflows spike. Post-2023 collapses of Signature and Silvergate banks, Tether’s cash reserves plummeted from over 10% to around $80-90M (roughly 0.05% of reserves) in Q3 2025, per attestations.
In stark contrast, Circle’s $USDC holds about 20% in cash equivalents, enabling $207.3B in redemptions over the past 12 months - over 30x Tether’s $6.18B. Tether’s issuances hit $49.3B in the same period, far outpacing redemptions and fueling concerns over sustainability.
@CryptoHayes completely missed this critical redemption issue in his recent Tether risk analysis.