Tether Loads Up on $122B in Treasuries as Bitcoin Slides — What It Means

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• Tether now holds over $122B in U.S. Treasuries, its highest level ever.
  
• Bitcoin’s recent drop reflects rising risk aversion across markets.
  
• Stablecoin pricing suggests moderate outflows, not panic.

Tether is quietly reshaping its balance sheet at the same time crypto markets are showing fresh signs of stress. The issuer of USDt, the world’s largest stablecoin, reported lower profits in 2025 but sharply higher exposure to U.S. Treasuries, while Bitcoin endured a steep pullback that has unsettled traders.

Together, the developments paint a picture of a market growing more cautious—yet far from capitulating.

Tether Profits Dip, But Reserves Grow More Conservative

Tether posted more than $10 billion in net profits for 2025, down roughly 23% from the prior year’s $13 billion. The decline came despite a strong increase in total assets, which rose by over $49 billion year-on-year.

More notable than the profit drop is where Tether is placing its capital. Direct U.S. Treasury holdings climbed above $122 billion, the highest level in the company’s history. Tether says the shift reflects a preference for highly liquid, low-risk instruments.

The company also issued approximately $50 billion in new USDt over the past 12 months, underscoring persistent global demand for dollar-denominated liquidity—especially in regions with limited access to traditional banking.

With a market capitalization around $185 billion, USDt remains the backbone of crypto trading liquidity, making Tether’s financial posture closely watched by exchanges, traders, and regulators alike.

Gold Reserves Add Another Layer to Tether’s Strategy

Beyond Treasuries, Tether continues to build out its exposure to physical gold. The company reports around $12 billion in gold backing tied to its XAUt token and holds roughly 130 metric tons of gold in total.

Each XAUt token is backed by gold stored separately and eligible for physical redemption, according to the company. This dual focus on Treasuries and gold suggests Tether is positioning itself to weather both crypto volatility and broader macro uncertainty.

Bitcoin’s Correction Spurs Risk-Off Behavior

Bitcoin recently fell about 10% in two days, briefly revisiting the $81,000 level. The drop coincided with $2.7 billion in net outflows from U.S.-listed spot Bitcoin ETFs since mid-January and a sharp pullback in gold prices.

Derivatives markets reflect heightened fear. Bitcoin options skew has turned strongly bearish, and roughly $860 million in leveraged long positions were liquidated over a 48-hour period. Still, overall futures open interest has been trending lower for months, suggesting excessive leverage had already been reduced.

One telling signal is stablecoin pricing in China. USDT currently trades at a small discount to the offshore yuan, indicating moderate capital outflows—but an improvement from last week’s deeper discount.

Also Read: Tether Buys 27 Tons of Gold as Tokenized Gold Market Explodes Past $5B

Tether’s expanding Treasury reserves point to confidence in stablecoin demand, even as traders seek safety. Bitcoin’s recent drawdown appears more consistent with a broad risk-off move than a structural breakdown.

Whether BTC can reclaim higher levels may depend less on crypto-specific narratives and more on shifting macro conditions that are driving demand toward cash and short-term government debt.For now, stablecoins—and Tether in particular—remain a key barometer of how much risk the market is willing to take.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.