CoinShares Head of Research James Butterfill gave a clear response to the Tether debate that has flared up again in the cryptocurrency markets in recent days.
Butterfill stated that comments from Arthur Hayes and S&P Global regarding Tether's bankruptcy risk were “taken too seriously by the market.” Pointing to Tether's latest report, Butterfill noted that the company had $174.45 billion in liabilities against approximately $181 billion in reserves, resulting in a surplus of approximately $6.8 billion. He noted that Tether, which generated $10 billion in profit in the first three quarters of 2025, is one of the most profitable companies in the sector.
Butterfill's assessment wasn't limited to Tether. The analyst noted that Japan was at the center of the recent volatility in global markets, adding that the increasing stress on long-term Japanese government bonds was straining global liquidity. He added that the weak demand seen in the 20-year JGB auction, in particular, indicated that Japanese capital, which has long kept global yields low, is now under pressure.
Butterfill noted that Japanese institutions have been pouring significant amounts of capital into US bonds and stocks for years, noting that even a partial return of these funds could squeeze global liquidity. He added that this situation could suppress risky assets and, in the long run, bolster Bitcoin's “alternative store of value” narrative.
Butterfill noted that weak employment data from the US has also exacerbated market fragility, noting that the 32,000-person employment decline makes a rate cut more likely in December, but that financial conditions remain tight. This tightness was among the factors that triggered the recent pullback in crypto assets.
Butterfill also commented on the renewed discussions surrounding Tether's bankruptcy, arguing that current data doesn't indicate a risk. He noted that the company has a large capital surplus and that the high-interest rate environment is driving its profits. However, he also argued that caution shouldn't be completely abandoned in the stablecoin space.
*This is not investment advice.
