Tether Should Sell Bitcoin Holdings, Says Early Uber Investor

Summary:
Jason Calacanis, an early investor in Uber, has called on Tether to sell its Bitcoin holdings and transition to holding only U.S. Treasuries. This move, he believes, will enhance the company’s credibility and mitigate systemic risks in the cryptocurrency market.

Key Takeaways

Jason Calacanis recommends that Tether sell all its Bitcoin holdings.
He suggests Tether should only hold U.S. Treasuries to ensure safety and transparency.
Tether should conduct two independent audits from American firms for better transparency.
S&P Global has downgraded USDT's dollar-peg stability, citing risks linked to Bitcoin holdings.
Tether’s current Bitcoin reserve is valued at approximately $9.0 billion.
Concerns about Tether's transparency have raised alarms in the cryptocurrency community.

Tether Should Sell Bitcoin Holdings, Says Early Uber Investor

Calacanis Advocates for Change in Tether's Operations

Jason Calacanis, a prominent early investor in Uber, is urging Tether to stabilize its operations and "Americanize" them in order to restore the company’s credibility and diminish systemic risks associated with it. His primary recommendation is that Tether should sell its entire Bitcoin portfolio.

Shift to Safer Assets

Calacanis argues that Tether, the leading stablecoin issuer, should transition to holding 100% U.S. Treasuries. By doing so, Tether would replace its riskier reserves with safer, liquid, and transparent government securities. This change is aimed at bolstering the company's financial stability and reliability.

Emphasis on Transparency

In addition, Calacanis has called for Tether to undergo two independent audits led by American firms. He believes that these audits would significantly enhance the transparency of Tether’s operations, addressing concerns that have arisen in the marketplace.

Downgrade in Stability

Recently, S&P Global downgraded the stability of USDT’s dollar peg to "weak." This decision was based on Tether’s Bitcoin holdings exceeding safe limits, lack of comprehensive audits, and the involvement of non-transparent custodians and counterparties.

Current Bitcoin Holdings

On-chain tracking indicates that Tether's Bitcoin reserve address currently holds approximately 87,296 BTC, which is valued at around $9.0 billion. Bitcoin is only a part of Tether’s overall reserve, which includes U.S. Treasuries, cash, and other investments.

Historical Perspective

Back in 2021, Calacanis referred to Tether as potentially being crypto's "black swan." He highlighted concerns related to Tether’s transparency, pointing out that, despite being the third-largest cryptocurrency by market capitalization, its opaque nature and lack of thorough audits posed significant risks.

Ongoing Concerns

Earlier this year, Calacanis reiterated the systemic risks posed by Tether and MicroStrategy due to their heavy exposure to the cryptocurrency market. Currently, Tether's flagship USDT token boasts a market capitalization of around $185 million, further emphasizing the importance of these recommendations for the company’s future stability.