Key Points
- Cantor Fitzgerald has secured a 5% ownership stake in Tether valued at approximately $600 million, marking a significant Wall Street entry into the cryptocurrency space.
- Howard Lutnick’s nomination as Commerce Secretary and involvement in Trump’s transition team could signal a potential shift in U.S. crypto policy, particularly as Cantor Fitzgerald plans a major Bitcoin lending program.
Strategic Partnership Emerges
Cantor Fitzgerald, the prominent Wall Street trading firm, has significantly deepened its relationship with stablecoin issuer Tether through a series of strategic moves. The firm, which has been custodian of Tether’s U.S. Treasuries since 2021, recently secured a 5% ownership stake in the company, valued at approximately $600 million. This valuation suggests Tether’s total worth at around $12 billion.
Ambitious Bitcoin Lending Program on the Horizon
In a notable expansion of their partnership, Cantor Fitzgerald is currently in discussions with Tether’s Giancarlo Devasini regarding a major Bitcoin lending initiative. The program, first announced in July, is set to launch with an initial $2 billion in funds, with potential growth into the tens of billions. This development represents a significant step in bridging traditional finance with cryptocurrency markets.
Political Implications and Regulatory Landscape
Howard Lutnick, Cantor Fitzgerald’s CEO and majority owner, has emerged as a key figure in the evolving cryptocurrency regulatory landscape. His recent nomination as Commerce Secretary in the Trump administration and role as co-chair of the transition team has drawn attention to potential shifts in U.S. crypto policy. However, the relationship faces scrutiny amid reports of criminal investigations into Tether’s potential involvement in illicit activities, though Tether CEO Paolo Ardoino has strongly denied these claims.
The stablecoin issuer has shown remarkable financial performance, reporting $7.7 billion in profit through the first nine months of the year, driven by soaring Treasury yields. Lutnick has announced his intention to step down from his positions at Cantor, BGC, and Newmark upon Senate confirmation, stating he will divest his interests to comply with government ethics rules.
