S&P Global Ratings has downgraded Tether's USDT stablecoin's ability to maintain its peg to the US dollar to the lowest rating and warned that a decline in Bitcoin prices could lead to undercollateralization risks for the stablecoin.

On Wednesday, the rating agency's analysts downgraded USDT's stability rating from "Limited" to "Weak." S&P stated that this assessment "reflects the increased exposure to high-risk assets in USDT's reserves over the past year," including Bitcoin, gold, secured loans, and corporate bonds, while also considering the limited disclosure of information.