Cantor Fitzgerald Acquires 5% Stake in Tether for $600 Million
Cantor Fitzgerald, a prominent US financial services firm, has strengthened its partnership with Tether, the issuer of the largest stablecoin, USDT. The collaboration includes a $600 million deal granting Cantor Fitzgerald a 5% stake in Tether, aimed at expanding into Bitcoin-backed lending.
This partnership is strategically significant for both firms. Tether has minted $13 billion USDT since November 8, 2023, with an additional $3 billion reported on November 24, bringing USDT's total supply to $132 billion due to increasing demand for stablecoins. Stablecoins like USDT are vital for crypto traders as they provide a reliable means for hedging market positions or executing transactions without fiat currency.
Tether will play a crucial role in Cantor Fitzgerald’s Bitcoin lending initiative, initially valued at $2 billion, with plans for expansion. This program aims to offer loans backed by Bitcoin, potentially drawing significant institutional interest. Furthermore, Cantor Fitzgerald manages a considerable portion of Tether's $134 billion reserves, primarily in US Treasury bills.
The partnership is further underscored by Cantor Fitzgerald’s CEO, Howard Lutnick, being nominated as Secretary of Commerce under President-elect Donald Trump. This appointment could enhance Tether's regulatory position in the US, despite ongoing allegations related to sanctions and anti-money laundering violations, which Tether denies. Lutnick has indicated he will resign from his roles at Cantor Fitzgerald if confirmed by the Senate.
Tether’s rapid minting coincides with a broader market rally led by Bitcoin and other major cryptocurrencies like Dogecoin and Solana. This resurgence indicates renewed investor confidence in the crypto market, with the increased USDT supply enhancing market liquidity and price stability. Stablecoins such as USDT are critical for maintaining equilibrium in the volatile crypto ecosystem.
Cantor Fitzgerald’s growing stake in Tether and its engagement in Bitcoin lending signify a deeper integration between traditional finance and digital assets. With Tether’s expanding influence and Cantor’s resources, this partnership may significantly impact future crypto adoption and regulatory discussions.