Cantor Fitzgerald to Tap Tether in $2B Bitcoin Lending Project, Secures 5% Stake

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As a seasoned analyst with over two decades of experience in the financial markets, I find the recent developments surrounding Howard Lutnick and Tether intriguing. Lutnick’s proposed Bitcoin financing project, if successful, could potentially revolutionize the intersection of traditional finance and digital assets. His appointment as Commerce Secretary under President-elect Trump adds another layer of complexity to this narrative.

According to Bloomberg’s sources, Howard Lutnick, Trump’s nominee for Commerce Secretary, is planning a $2 billion initiative to offer loans in exchange for Bitcoin as security. This was reported on November 24th.

As a crypto investor, I’m excited about the news that the initial funding for this project is set at a substantial $2 billion. Moreover, according to reliable sources, it’s forecasted that this figure could potentially soar into the tens of billions in the future, as reported by Bloomberg.

As of now, Lutnick’s financial organization, Cantor Fitzgerald, is responsible for safekeeping services related to Tether. They store the massive amounts of U.S. Treasury securities that function as reserves for the U.S. Dollar Tether (USDT) stablecoin.

Cantor Tether Partnership

In the process of taking on a U.S. government role, Lutnick is arranging for his firm’s dealings with Tether to be managed by his colleagues instead. It’s worth mentioning that Brandon Lutnick, his son who trades at Cantor, had previously completed an internship with Tether in Lugano, Switzerland, according to Bloomberg.

A representative from Tether Investments has shared with Reuters that they are considering using some of their previous earnings to explore various potential ventures.

In June, Cantor unveiled their Bitcoin investment venture, expressing their enthusiasm at the opportunity to fully realize Bitcoin’s capabilities and further bridge the divide between conventional finance and digital currencies.

Moreover, it was reported over the weekend that Cantor agreed to invest up to $600 million in Tether, which translates to approximately a 5% shareholding.

Adam Back, a Bitcoin pioneer, muses if it could be an older share purchase made during a time with lower interest rates and a smaller Tether market cap. He also suggests that it seems underpriced considering the calculated revenue one could generate from interest at current treasury rates.

Cantor Fitzgerald is buying 5% of Tether for $600M.

In a simple rewording, we can say that Cantor acquires a share in an extremely successful corporation, whereas Tether secures regulatory safeguards.

Cantor CEO @howardlutnick, is Trump’s pick for Commerce Secretary.

Somewhere, @Bitfinexed is crying.

Bullish for Bitcoin.

— Wayne Vaughan (@WayneVaughan) November 24, 2024

According to repeated claims by the Wall Street Journal, Tether has been subjected to fear, uncertainty, and doubt (FUD). Their most recent allegation in October suggested that Tether is under investigation for not adhering to Anti-Money Laundering (AML) laws. However, CEO Paolo Ardoino refuted this accusation, dismissing it as recycled “old news.

Experts are hinting that regulatory scrutiny on Tether, a digital currency, might soon diminish under the newly elected pro-cryptocurrency administration.

Tether Supply Surges

The amount of Tether’s USDT in circulation has significantly increased by over 10%, reaching approximately $132.8 billion, which puts it at a powerful market control of around 68.5%.

Recently, the combined value of all stablecoins has soared to an unprecedented peak of $194 billion, making up about 5.5% of the overall worth in the cryptocurrency sector, as reported by Coingecko.

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2024-11-25 23:16