Jay Newman

Forty-year veteran of international finance and author of UNDERMONEY, a financial/political thriller set in the world of hedge funds

[Jay Newman @jaynewman]

@robotaxi When in Miami Beach

[Jay Newman @jaynewman]

@MoniAnnMcGregor No meat there. Tether is the main course.

[Jay Newman @jaynewman]

@ZforVendetta1 @allenanalysis Tether

[Jay Newman @jaynewman]

@JenniferKorey @allenanalysis Why don’t they both just do the right thing and resign?

[Cory 🦢 Real Bitcoin @ Swan.com @CorySwan]

Who is "Nav Singh" and why was @BoHines' NXUM Capital website just taken offline?

https://t.co/SA68hevOlo

NXUM gave $1M to the Trump campaign a week before the election, and Trump gave Hines the White House crypto job two months later.

[Brian Cohen @inthepixels]

The Great Stablecoin Arbitrage: Public Trust vs. Private Profits

The Executive Thesis

The digital asset market currently hosts a striking paradox that defies traditional valuation logic. On one side, Tether ( $USDT ) dominates in scale, profitability, and global liquidity. On the other, Circle (NYSE: $CRCL) $USDC leads in transparency, compliance, and institutional integration. Despite these diverging paths, capital markets have assigned them radically different frameworks.

With Circle’s 2025 IPO on the NYSE, we now have a transparent benchmark for stablecoin equity. When contrasted against Tether’s rumored $500B private valuation, a blunt conclusion emerges: Either Tether is the most overvalued private entity in modern finance, or Circle is the most underpriced financial infrastructure play on the public market.

Structural Reality: The Transparency Divide
The most immediate distinction lies in the corporate DNA of these two giants. As a publicly traded entity, Circle operates under the continuous scrutiny of SEC reporting, audited financials, and quarterly earnings calls. This creates a "Transparency Premium," where every dollar of reserve is accounted for under rigorous Deloitte audits and AICPA standards. Circle’s daily liquidity and price discovery allow institutional investors a clean entry point into the "utility" of the US Dollar on-chain.

In contrast, Tether remains a private entity domiciled in El Salvador, operating with limited disclosures and quarterly attestations that offer only "limited assurance." While Tether is undeniably a high-performing financial machine, it behaves like an opaque hedge fund rather than a regulated utility. Because Tether’s valuation is driven by private placements and narrative scarcity rather than continuous public market vetting, its $500B target reflects an "Opacity Discount" that the private markets have, so far, chosen to ignore.

Reserve Philosophy: Safety vs. Yield Optimization
The divergence extends to how these entities back their tokens. Circle operates as a "narrow bank," maintaining a liquidity-first, risk-minimized profile. Its ~$79B in circulation is backed almost exclusively by cash, short-term U.S. Treasuries, and BlackRock-managed government money market funds. There is zero exposure to volatile crypto assets, gold, or private lending.

Tether’s ~$186B circulation follows a "yield-maximized" strategy. While it holds a massive $122B in Treasuries, its balance sheet is diversified into roughly $17.5B in Gold, $8.4B in Bitcoin, and $17B in secured loans and other risk assets. While this makes Tether immensely profitable during bull markets, it shifts the entity’s profile from a simple payment rail to a shadow bank/hedge fund hybrid. This fundamental difference in risk appetite is currently being mispriced by a market that treats both tokens as "equal" at a $1.00 peg.

The Regulatory Endgame and SWOT Dynamics
Circle is building for "Regulatory Inevitability." By aligning with the GENIUS Act and MiCA, it has created a regulatory moat that makes it the preferred partner for Western banks and institutional tokenization projects. Its primary strengths—compliance and trust—are also its primary weaknesses in the short term, as higher compliance costs and conservative reserves lead to lower margins compared to its offshore rival.

Tether, conversely, is the master of "Regulatory Arbitrage." It wins today’s liquidity war by dominating offshore trading pairs and emerging market dollarization where U.S. oversight is absent. However, this creates a significant "Tail Risk." While Tether has the first-mover advantage and massive network effects, it faces the constant threat of a regulatory crackdown or a "Black Swan" event involving its complex reserve composition.

...continued...

[Jay Newman @jaynewman]

@CorySwan Complicated comment from Gross Howard: he knows there was blackmail? So, he knows who was being blackmailed. And why. Time for Gross Howard to take the stand.

[Jay Newman @jaynewman]

Sabin Howard in his own words https://t.co/qgYXtCa7yS

[Jay Newman @jaynewman]

@MullahPolitik Coming your way!

[Jay Newman @jaynewman]

Worth the trip…William Nicholson https://t.co/6fK6WNJW7u

[Jay Newman @jaynewman]

@nicolegelinas Since he can’t be president he can be governor after he fixes NYC.

[Jay Newman @jaynewman]

@nicolegelinas Lina Khan?

[Jay Newman @jaynewman]

@daskeel @cate_long @JPHusker_ You can’t debate the fact that the board has done a lousy job—at great expense. Shame, Professor! Shame!

[Jay Newman @jaynewman]

A new take on BITs https://t.co/5uWaDprPW7

[Jay Newman @jaynewman]

Modest proposals for Mamdani

https://t.co/TKBKaBKL0c

[Jay Newman @jaynewman]

Government owned supermarket: Havana

[Javier Milei @JMilei]

EXCELENTE ARTÍCULO PARA PODER ENTENDER QUE ESTÁ PASANDO CON EL CASO YPF

https://t.co/a4FKPJobhq

[Jay Newman @jaynewman]

American judges will soon decide the fate of Argentina (again) via @FT
https://t.co/ALeh9Ify4D

[Jay Newman @jaynewman]

Civilization means protecting the innocent… https://t.co/bqV2h2SxJS

[Jay Newman @jaynewman]

Risk is everywhere… https://t.co/Td3jlQ1fHP