S&P Downgrades Tether to ‘Weak’ as Bitcoin Risks Eclipse Safety Buffer 📉
S&P Global Ratings has revised its stability assessment of Tether (USDT), downgrading it to 'weak' (5), which is the lowest level on its 1-to-5 scale. This downgrade was motivated by Tether's altered reserve composition, where exposure to volatile assets like Bitcoin now surpasses the company's equity buffer.
S&P expressed concerns over Tether's reserves, risk management, and disclosure policies, leading to the downgrade. The shift in Tether's reserve strategy, emphasizing increased Bitcoin exposure, was identified as a critical element affecting its stability evaluation. Such changes pose potential risks to Tether's financial solidity, eclipsing its established safety buffer.
Source: coinedition.com ↗
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