Arthur Hayes has commented on Tether's recent audit, suggesting the stablecoin issuer is executing a massive interest rate trade. He interprets their strategy as a hedge against potential Federal Reserve rate cuts, which would diminish their interest income from treasuries. By purchasing gold and Bitcoin, Tether appears to be betting on asset appreciation to counterbalance the lower yields expected from traditional government debt in a falling rate environment. Hayes describes this move as a hedge against the "falling price of money." If rates drop, the value of hard assets like Gold and Bitcoin is expected to rise, thereby protecting the company's revenue streams. However, this strategy is not without risk. Hayes has pointed out that while treasury bills are relatively stable, gold and Bitcoin are volatile. A significant drop in the value of these assets could theoretically threaten the company's equity buffer, although the current strategy seems focused on the upside of the macro cycle. [Update 1] Additional reports confirm Hayes' comments regarding Tether's positioning for asset appreciation in a lower-rate environment, reinforcing the view that the company is proactively diversifying away from sole reliance on treasury yields.