News Block: Is Tether Buying Gold over Bitcoin? USDT vs. S&P, Musk on Bitcoin & Quiet Bank Rule Change

Summary

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Coin Stories – News Block

Host: Natalie Brunell
Episode Date: December 1, 2025
Episode Theme:
Natalie Brunell delivers a rapid-fire roundup of the week’s most important developments surrounding Bitcoin, Tether’s reserve strategies, critical shifts in US banking regulations, and the ongoing march of Bitcoin into mainstream finance. The episode tackles controversial reporting on Tether’s reserve composition, a stealthy regulatory change affecting US banks and Treasury markets, and a series of milestones in Bitcoin’s institutionalization — capped off by notable commentary from Elon Musk.

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Key Topics & Insights

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1. Tether Under the Spotlight: Reserve Controversy and Rating Downgrade

• [00:17–04:37]
  • The biggest story revolves around S&P Global Ratings downgrading Tether’s USDT stablecoin from “constrained” to “weak” — the lowest on its stablecoin scale.
    • Reason: S&P is “increasingly worried” about Tether’s reserves, especially its growing allocations to Bitcoin and gold, which are considered volatile and could, in a market downturn, risk making USDT undercollateralized.
  • Tether and others push back:
    • Industry analysts note that S&P is looking only at disclosed reserves, neglecting Tether’s sizeable corporate equity stack (which includes mining and other ventures), all underpinned by over $10B in profit year-to-date.
    • Tether CEO Paolo Ardoino responds:
      • “Tether built the first over capitalized company in the financial industry with no toxic reserves and remains extremely profitable.” (~03:15)
      • He also emphasizes S&P “failed to consider Tether's equ[ity] and its roughly $500 million in monthly profits generated by the interest from its treasury holdings alone.”
    • Natalie’s take: “Contrary to what S&P suggests, Tether actually appears over-collateralized… one could even make the argument that Tether looks more liquid and better collateralized than the vast majority of traditional 'too big to fail' banks." (~04:10)
  • Behind the controversy:
    • It’s a fundamental disagreement about prudent reserves: Tether sees Bitcoin and gold as diversification and protection against currency debasement, while S&P sees them as risky assets.
  • Noteworthy statistics:
    • Financial Times reports Tether has bought more gold than any central bank over the past 2 quarters.
    • Jefferies suggests Tether’s demand has driven recent gold outperformance.
  • Debunking the “Tether prefers gold over Bitcoin” narrative:
    • Tether still holds over 87,000 BTC and allocates up to 15% of net operating profits toward ongoing Bitcoin purchases. Bitcoin holdings are verifiable on-chain.

“This is not a gold versus Bitcoin story. No, this is a story of how corporate treasury strategy is transforming… and about Tether evolving into a global financial behemoth that's now big enough to move markets in Treasuries, gold, and Bitcoin.”
— Natalie Brunell, [04:25]

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2. Quiet Bank Rule Change: US Regulators Ease Bank Capital Rules

• [05:10–07:15]
  • Significant but under-the-radar move: Regulators relax capital requirements for large banks, specifically the “enhanced supplementary leverage ratio.”
    • Effect: Allows big banks to hold more Treasuries with less equity capital, freeing up balance sheet space. Official rationale: “to support market liquidity.”
  • Underlying motive:
    • As macro analyst Luke Gromen notes, set against the largest October budget deficit in US history, regulators are engineering demand for government debt to prevent spikes in interest rates and exploding refinancing costs.
    • Fed Governor Stephen Myron affirmed the change makes it easier for banks to keep the Treasury market functioning, especially in volatility.
  • Host’s summary:
    • The maneuver manufactures Treasury demand via the banking sector instead of tackling deficits directly, kicking the can further down the road — classic late-stage debt cycle behavior.

“Behind all the technical jargon, this is really about manufacturing demand for Treasuries through the banking system so the cost to finance the deficit doesn't spike... Nothing is going to stop them from spending and running large deficits. Rather than cutting back, they're changing the rules to manufacture demand for new debt and kicking the can a little further down the road. As Lyn Alden says, nothing stops this train.”
— Natalie Brunell, [06:55]

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3. Bitcoin’s Institutional and Mainstream Momentum

• [07:15–10:55]

  • Five story highlights signal mainstream adoption:

    1. Elon Musk on Bitcoin’s Energy Principle (Clip at 07:25)
    • “Energy is the real, is the true currency. This is why I said Bitcoin is based on energy. You can't legislate energy... it's very difficult to generate energy or especially to harness energy in a useful way, to do useful work.”
      — Elon Musk, [07:25]
    • Natalie expands: “Bitcoin turns real-world energy into verifiable digital scarcity... it can be thought of as energy money.”
    2. NASDAQ International Securities Exchange asks SEC to raise IBIT options trading limit
    • Seeking to raise from 250k to 1 million contracts — only happens when “real sustained demand from big players” emerges.
    • Jeff Park (Pro Cap BTC CIO): “At last, IBIT options are finally getting the treatment they deserve. Institutional volume is finally here.”
    3. JP Morgan launches more structured notes linked to BlackRock’s IBIT ETF:
    • Provides leveraged upside with downside protection; growing use of bespoke Bitcoin exposure signals strong institutional demand.
    4. BlackRock’s own funds are buying IBIT:
    • The strategic income opportunities fund now holds nearly 2.4 million shares, up 14% since June.
    • “IBIT has now become the firm’s most profitable product,” despite launching less than two years ago.
    5. Texas: first US state to buy a Bitcoin ETF (IBIT):
    • Purchased ~$5 million as part of a strategic Bitcoin reserve.

  • Big Picture:

    • These headlines together indicate Bitcoin’s integration into “mainstream financial and institutional architecture.”

“Taken together, these aren’t just one-off headlines, they are major signposts. TLDR: Bitcoin is being integrated step by step into the mainstream financial and institutional architecture.”
— Natalie Brunell, [10:49]

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Notable Quotes & Memorable Moments

• Paolo Ardoino (Tether CEO):

  “Tether built the first over capitalized company in the financial industry with no toxic reserves and remains extremely profitable.”
  — [03:15]

• Elon Musk:

  “Energy is the real, is the true currency...this is why I said Bitcoin is based on energy.”
  — [07:25]

• Natalie Brunell:

  “Contrary to what S&P suggests, Tether actually appears over-collateralized…one could even make the argument that Tether looks more liquid and better collateralized than the vast majority of traditional 'too big to fail' banks.”
  — [04:10] “Nothing is going to stop them from spending and running large deficits. Rather than cutting back, they're changing the rules to manufacture demand for new debt and kicking the can a little further down the road.”
  — [06:55]

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Timestamps for Key Segments

• Tether USDT Downgrade & Treasury Philosophy: 00:17 – 04:37
• US Bank Capital Rule Change & Treasury Demand: 05:10 – 07:15
• Elon Musk and Institutional Bitcoin Developments: 07:15 – 10:55

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Episode in a Nutshell:
In 10 fast-paced minutes, Natalie Brunell breaks down why Tether’s reserves have come under fire (and why the reality might be less dire than S&P claims), unpacks the stealthy shift in US bank regulation designed to prop up Treasury demand, and details five fresh signals that Bitcoin is gaining ground as an institutional asset — most memorably, through the words of Elon Musk and the concrete actions of Texas, BlackRock, and major banks.

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Transcript

[A]

Welcome to the Coin Stories News Block, powered exclusively by LEDN. I'm Natalie Brunel and in about 10 minutes or less I'll provide you with insightful updates on bitcoin, financial markets and the global economy. Everything you need to know in one block. Let's go.

[B]

Hope everyone had a great holiday. We saw a little Thanksgiving bounce for Bitcoin, which popped back over $90,000 on the holiday weekend, only to suddenly drop on Sunday evening back to 87,000 as about $400 million worth of levered longs were liquidated in just about an hour. Now, besides the price action, we have lots of news to dive into and some of the biggest stories over the past week all revolved around Tether, the largest stablecoin issuer in the world. So let's start right there. Things kicked off when S and P Global Ratings downgraded Tether's USDT stablecoin from constrained to weak, the lowest score on its stock stablecoin scale. That felt pretty harsh to many, given that USDT is by far the largest and most liquid stablecoin in the world. S and P says it's increasingly worried about what backs it, mainly that Tether now holds more Bitcoin and gold in its reserves. In their view, if there's a major market sell off, those assets could fall in value and leave USDT under collateralized. Tether and others immediately pushed back on the report. A former City Research crypto lead pointed out that what Tether discloses as reserve reserves is not its entire balance sheet. On top of those reserves, there's a whole separate corporate equity stack that includes its mining operations and other investments, all funded by a business that has reported more than $10 billion in profit year to date. Tether CEO Paolo Arduino responded by saying, quote, tether built the first over capitalized company in the financial industry with no toxic reserves and remains extremely profitable. And he added that S P failed to consider Tether's equ and its roughly $500 million in monthly profits generated by the interest from its treasury holdings alone. So contrary to what S and P suggests, Tether actually appears over collateralized when you take into account the company's equity and the size and composition of its reserves. In fact, on paper, one could even make the argument that Tether looks more liquid and better collateralized than the vast majority of traditional too big to fill banks out there. The core issue is there seems to be a fundamental disagreement about what prudent reserves look like to agencies like S and P. Companies like Tether see Bitcoin and gold as a way to diversify their treasury and protect against currency debasement and inflation. S and P mostly sees them as added risk now. Despite the downgrade, I don't think Tether is going to stop buying gold or Bitcoin anytime soon. The Financial Times recently reported that Tether has bought more gold than every central bank over the last two quarters. That's pretty insane. Jefferies estimates that this new demand from Tether has likely been a meaningful driver of gold's recent outperformance. Of course, some people saw this and viewed it as a sign that Tether prefers gold over Bitcoin now. But that's not really what's happening here. Tether still holds more than 87,000 bitcoin, and since 2023, it's had a policy to allocate up to 15% of its net operating profits into buying more Bitcoin on an ongoing basis. So Tether is still buying Bitcoin. And unlike its gold holdings, its Bitcoin holdings are verifiable on chain. This is not a gold versus Bitcoin story. No, this is a story of how corporate treasury strategy is transforming in response to new innovations like Bitcoin and a macro environment that is forcing capital allocators to rethink how they preserve capital. Additionally, it's a story about rating agencies continuing to misprice Bitcoin risk and about Tether evolving into a global financial behemoth that's now big enough to move markets in Treasuries, gold and Bitcoin. Which is exactly why everyone is watching it so closely. Need cash, but don't want to sell your Bitcoin? Leden is the global leader in bitcoin backed loans, issuing over $9 billion in loans since 2018. And they were the first to offer proof of reserves. With Leaden, you get custody loans, no credit checks, no monthly payments and more. Visit Leden IO Natalie to learn more and get a quarter percentage point off your first loan. All right, our next story takes us to the heart of the US Banking system and the treasury market. While everyone was watching price charts, regulators quietly did something very important. They relaxed key capital requirements for big banks in a way that makes it easier for them to hold more Treasuries, more government debt. Regulators finalized changes to what's called the enhanced supplementary leverage ratio. It basically says how much equity capital the biggest banks have to hold against their total assets. Under the new rule, large banks can run with less capital relative to their balance sheets, which in practice frees up room for them to hold more safe assets like Treasuries. Officially, we're being told this is all about supporting market liquidity. But if you zoom out, the real reason behind this becomes very clear. Macro analyst Luke Roman framed it as a story in two parts. On one side, you have the US Posting the largest October budget deficit in history, even bigger than during COVID And on the other side, you have headlines reading, US Regulators relax key Bank Capital rules tied to Treasuries. What Luke is saying here is that the government needs more demand for its debt at a time when it's running massive deficits and rolling over huge amounts of existing bonds. If they don't find that demand, then interest rates will spike and the cost to refinance the debt will explode, blowing out the deficits even more. So one way they can try to create this demand is by tweaking the capital rules so banks are incentivized to hold more Treasuries. Fed Governor Stephen Myron basically said the quiet part out loud in a recent speech. In it, he argued that by relaxing the capital rule, regulators have made it easier for banks to keep the treasury market functioning smoothly and reduce the risk of making it harder and more expensive for the government to sell its debt, especially when markets get volatile. In other words, we have a problem. Record deficits and trillions in debt that needs to be refinanced. And. And their solution? Loosen bank capital rules so big banks have more balance sheet capacity to absorb that debt. So behind all the technical jargon, this is really about manufacturing demand for Treasuries through the banking system so the cost to finance the deficit doesn't spike. If you read between the lines, the takeaway here is that nothing is going to stop them from spending and running large deficits. Rather than cutting back, they're changing the rules to manufacture demand for new debt and kicking the can a little further down the road. This is exactly the kind of behavior you'd expect to see toward the end of a long term debt cycle. As Lyn Alden says, nothing stops this train. All right, for our final section of the news block, I want to highlight five stories that all point in the same direction. Bitcoin becoming more institutionalized and mainstream. First, in a new interview this week, Elon Musk had more to say about Bitcoin. Take a listen.

[C]

Energy is the real, is the true currency. This is why I said Bitcoin is based on energy. You can't legislate energy. You can't just, you know, pass a law and suddenly have a lot of energy. It's very difficult to to generate energy or especially to harness energy in a, in a useful way, to do useful work.

[B]

What Elon's referring to in that clip is a tweet he posted about a month ago where he wrote, that is why Bitcoin is based on energy. You can issue fake fiat currency and every government has done so, but it is impossible to fake energy. In other words, one of the wealthiest and most influential people on the planet is zeroing in on what makes Bitcoin so special. Bitcoin turns real world energy into verifiable digital scarcity. Through that lens, it can be thought of as energy money. Second, NASDAQ's International Securities Exchange just asked the SEC to quadruple the trading limit on options tied to BlackRock's IBIT ETF from 250,000 contracts to 1 million. Moves like that only happen when there is real sustained demand from big players who need options for hedging, risk management and more sophisticated strategies. Pro Cap BTC CIO Jeff park wrote, quote, at last, IBIT options are finally getting the treatment they deserve. Institutional volume is finally here. Third, JP Morgan is now offering a structured note linked to IBIT for its institutional clients. But by my count, the bank has already issued several similar IBIT linked notes over the past year. And in simple terms, this new note offers an investor leveraged upside with a downside buffer. It's important to note that these derivative products aren't really bought so much as they're sold. A client asks a bank to create a note with a specific payoff and risk profile. The bank then structures the note using IBIT as the underlying asset and takes a fee for providing that service. The fact that there are already multiple of these IBIT notes today tells you there's growing institutional demand for tailored Bitcoin exposure wrapped in a familiar Wall street wrapper. But we're still in the early days of the Bitcoin linked structured note market. Fourth, BlackRock isn't just selling IBIT to others, it's also buying some itself. BlackRock's strategic income opportunities portfolio, one of the firm's own in house mutual funds, has increased its exposure to Bitcoin. The latest filing shows it now holds nearly 2.4 million shares of IBIT, up 14% from June. This fund typically allocates to government debt, corporate credit, mortgages, emerging markets and cash like assets. So it's notable to see it using IBIT as a way to diversify its portfolio and boost its returns. And it's hard to overstate just how big of a success IBIT has been for BlackRock, it has now become the firm's most profitable product. This is especially notable given that IBIT launched less than two years ago and the firm manages over 1400 ETFs globally. And last but not least, Texas made history when it became the first US State to buy bitcoin. Well, a bitcoin etf. But it's a start. Last week it reportedly bought around $5 million worth of ibit to fund its strategic Bitcoin reserve as part of its long term treasury strategy. Taken together, these aren't just one off headlines, they are major signposts. TLDR Bitcoin is being integrated step by step into the mainstream financial and institutional architecture.

[A]

That's it for the news block. Your weekly Bitcoin and economic news update. Powered exclusively by ledn. I'm Natalie Brunel.

[B]

Make sure you're subscribed to Coinstory so.

[A]

You never miss an episode. This show is for educational purposes and should not be construed as investment advice. Until next time, keep stacking.

[B]

Sam.