Tether's Buffer Shrinks Amid Unprecedented Market Volatility

Tether's Q2 2026 attestation reveals a significant drop in excess reserve buffer from $8.23 billion to $4.11 billion, despite earning $1.5 billion in net operating profit.

This shrinkage is attributed to unrealized losses on gold and Bitcoin holdings, with gold losing $1 billion and Bitcoin losing approximately $820 million in market value.

The combined unrealized losses reached $1.8 billion during this period, and the safety cushion is only about 2% of Tether's total assets against $183.64 billion in liabilities.

Tether's reliance on a single counterparty for its $135 billion to $138 billion Treasury position introduces risk, and regulatory scrutiny remains high following the 2021 CFTC settlement of $41 million and the $18.5 million NYAG settlement.