Today, S&P downgraded Tether's rating to the lowest level, Tier 5, causing a minor panic. The main reason, according to S&P, is that Tether's BTC holdings as a percentage of total USDT liquidity are too high, reaching 5.6%, higher than the 3.9% reported in the third-quarter financial report. S&P believes that if BTC continues to fall, it could lead to insufficient collateral for USDT. Despite this, Tether continues to increase its BTC holdings, and CEO @paoloardoino refuted this, saying that Tether is still in a state of excess capital, meaning they have too much money and nowhere to put it. 😂 However, S&P's rating of Tether wasn't very high to begin with; it only started rating Tether in 2023 and had always been Tier 4. This is just another downgrade to the lowest level, so thankfully it's not a major issue.