USDT is one of the most popular stablecoins in the space and it's one of the most used pairs to trade cryptocurrencies. This stablecoin aims to be always pegged 1:1 to the USD. For it to be always worth the same as the USD, the company behind it has to have reserves that match the current supply of USDT circulating.

According to Tether and their independent audit, Tether holds 85,05% of their USDT supply in cash or cash equivalents, 0,13% in corporate bonds, 3,78% in precious metals, 1,94% in Bitcoin, 6,36% in secured loans and 2,73% in other investments.
Cash and cash equivalents can be used to signify a variety of things, so let's break down the largest component of this cake. The 85,05% in cash and cash equivalents is made up of 75,86% US Treasury Bills, 12,09% overnight reverse repurchase agreements, 0,78% term reverse repurchase agreements, 11,06% money market funds, 0,12% cash and bank deposits, and 0,09% non-US Treasury Bills.

All of these figures suggest that a very small portion of Tether's holdings actually represent real money. U.S. Treasury Bills are the principal holdings, according to Tether, and there are other unidentified investments in the mix.
As we all know, a stablecoin can be deppegged with just a minor fall in reserves; presumably, reserves must at least be valued at the same as USDT supply. Tether had 67 billion dollars in assets and 66 billion dollars in liabilities on June 30, 2018, implying that the reserves were worth $1 billion more than the supply.

There are already more than 83 billion USDT in circulation, which means that Tether would need to increase their reserves by nearly 30 billion dollars. The first question is whether Tether now has 83 billion in reserves. Does Tether constantly keep the same amount of reserves on hand as it does in USDT supply, or does it keep reserves just when an audit is about to be conducted?

This uncertainty is what causes some users to worry about Tether; if they don't always hold their reserves appropriately, it just takes an event like a leak to cause USDT to fall precipitously and crash the market.
This uncertainty is what causes some users to worry about Tether; if they don't always hold their reserves appropriately, it just takes an event like a leak to cause USDT to fall precipitously and crash the market.

Even though USDT is so despised, it plays a significant role in the market. Tether needs to do more to reassure people that they are acting properly. They have a poor reputation in the cryptocurrency community and are charged with a variety of offenses, including market manipulation.
Will USDT ever provide users with the assurance that they are 100 percent legitimate and not a house of cards ready to collapse? Will we ever get to know those hidden details behind USDT