Crypto news

Paolo Ardoino, CEO of Tether and CTO of Bitfinex, has drawn a chilling parallel between the current state of the U.S. tech sector and the infamous crypto crisis of 2022. His warning is based on the rapid growth of "hidden" debt among the five largest tech giants.

An analysis by Nikkei shows that the combined hidden debt of Alphabet, Microsoft, Amazon, Meta (recognized as extremist in Russia), and Oracle has grown approximately eightfold over the past four years, reaching an estimated $1.65 trillion. This explosive growth comes amid aggressive investments in artificial intelligence (AI).

History Repeating?

Ardoino points to a frightening similarity with 2022, when several crypto companies lent to each other in a circular manner, relying on verbal agreements and opaque obligations. The collapse of one player—Terra—then triggered a domino effect, bringing down the entire ecosystem. Now, in his view, history risks repeating itself, but at the level of global technology corporations.

What is the Danger of Hidden Debt?

The key issue is that "hidden" debt is not reflected on companies' balance sheets. This makes it difficult for investors to assess real risks. In the latest reported quarter, the volume of these off-balance-sheet obligations ($1.65 trillion) already exceeded the debt recorded on balance sheets (approximately $1.35 trillion). Part of Nikkei's data is based on estimates, adding uncertainty. It is expected that after the release of second-quarter reports (four of the five companies, except Oracle, report this week), the final figures could become even more alarming.

My expert opinion: The situation resembles a classic "AI bubble," where giants enter an arms race, accumulating debts that may prove unrecoverable if AI revenues do not materialize as promised. The market, fixated on hype, ignores these "time bombs" on balance sheets. Investors should take this analogy with 2022 very seriously—back then, the crypto market also considered itself "too big to fail."