Cantor Fitzgerald’s Tether Play: A $600M Power Bet On Crypto
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Bitcoin Hits $100K: Powell’s “Virtual Gold” and Putin’s Endorsement Shape the Narrative
This week, Bitcoin surged past the historic $100,000 mark, propelled in part by unexpected comments from Federal Reserve Chair Jerome Powell.
Speaking at the New York Times DealBook Summit, Powell compared Bitcoin to “virtual gold,” emphasizing its speculative nature over its utility as a currency. “It’s not a competitor for the dollar; it’s really a competitor for gold,” he said, highlighting Bitcoin’s volatility and claiming it has limited use for payments.
While Powell dismissed Bitcoin as a rival to fiat currencies, his remarks appeared to validate its status as a legitimate asset class. Markets reacted enthusiastically, with Bitcoin climbing 3% to peak at $103,607.
Across the globe, at the Moscow Investment Forum, Russian President Vladimir Putin offered a starkly different perspective.
Denouncing the U.S. dollar's dominance as a political weapon, Putin endorsed Bitcoin as a viable alternative reserve asset. “Who can ban Bitcoin? Nobody,” he declared, framing it as a resilient and inevitable force in the global financial system.
Whether Bitcoin aligns more closely with gold or greenbacks, one thing is certain: the Biden administration’s cautious stance on crypto regulation means the next administration will have a decisive role in shaping its future in U.S. markets.
Crypto Tethered to the White House: Cantor Fitzgerald’s $600 Million Move
In a world where stablecoins are the backbone of crypto markets, a $600 million bet on Tether by Cantor Fitzgerald is a headline-grabbing move. The financial services firm has reportedly acquired a 5% stake in stable coin issuer Tether Holdings Ltd.
For Cantor, this stake secures a foothold in one of the most profitable and controversial in the digital asset space. For Tether, it’s an alliance that might shift its regulatory standing.
Why This Deal Makes Sense
Tether is immensely profitable, reporting $7.7 billion in profit for 2024, driven by U.S. Treasury holdings yielding approximately 5%. As one of the most profitable entities in the crypto space, Tether manages over $86 billion in assets, much of it invested in U.S. Treasuries, earning billions annually from interest alone.
For Cantor Fitzgerald, a minority stake in Tether represents a strategic portfolio addition, offering stable, high-margin returns amid global market uncertainty. This move underscores Cantor's ambition to lead the integration of TradFi and crypto.
Tether already partners with Cantor for custody services, entrusting it with billions of dollars in U.S. Treasuries backing the USDT stablecoin—a partnership reportedly generating tens of millions annually for Cantor. Additionally, the two firms are said to be in discussions about supporting a multibillion-dollar lending program from Cantor. This initiative aims to provide dollar loans secured by Bitcoin as collateral, starting with $2 billion in funding and potentially scaling into the tens of billions.
For Tether, the benefits of this deal play into a longer game: Tether has long been the subject of scrutiny—from allegations about its reserves to questions about its transparency. Partnering with Cantor, a venerable name in finance, grants Tether a degree of legitimacy that could help deflect some of its critics. This partnership takes on even greater significance with Cantor CEO Howard Lutnick tapped for the position of Commerce Secretary, making him the Trump administration's top economic policy official if confirmed.
Lutnick’s role in shaping U.S. policy could offer Tether a unique advantage in navigating regulatory challenges. Having an established Wall Street ally with direct ties to the highest levels of government could provide Tether with critical regulatory insulation, smoothing the path for negotiations and offering a potential lifeline should stablecoin regulation tighten.
Risks and Concerns
While Tether prints profits now, its long-term stability is far from guaranteed. Questions linger about how Tether would fare in a financial crisis or if the broader crypto market faces a significant downturn. For Cantor, the reputational risk of being tied to Tether cannot be ignored. Tether has faced longstanding scrutiny over its potential ties to financial crimes, with critics alleging it has been used to facilitate money laundering, evade sanctions, and obscure illicit transactions.
While the company denies wrongdoing and has taken steps to bolster its compliance measures, regulators and watchdogs continue to raise questions about its role in enabling untraceable flows of capital across borders.
Stablecoins remain a regulatory gray area in the U.S. As governments worldwide explore Central Bank Digital Currencies (CBDCs), stablecoins like Tether could face existential threats. Cantor’s stake is a bet that Tether can navigate these hurdles, but it’s a bet nonetheless.
While Tether has made strides in publishing its reserve attestations, skeptics argue that its opacity remains a liability. Partnering with Cantor might boost its image in some circles, but it doesn’t resolve lingering doubts about Tether’s operational robustness or its potential systemic risk to the crypto ecosystem.
What This Means for Investors
For investors, Cantor’s move is a double-edged sword. On the one hand, it signals confidence from a major financial institution in the profitability and staying power of crypto’s infrastructure. On the other hand, it underscores how deeply crypto is becoming entwined with traditional finance, for better or worse.
If you’re bullish on crypto, this partnership is an indicator of institutional acceptance and the maturation of the industry. A stronger Tether means greater liquidity and stability in crypto markets—both critical to Bitcoin’s long-term adoption.
However, investors should also consider that while stablecoins like Tether are increasingly central to global finance, yet they operate with limited oversight. As traditional institutions integrate further into this space, they bring more scrutiny—but also more entanglement. The fallout from any future Tether crisis wouldn’t just hit crypto; it could ripple into broader financial markets.
The Bigger Picture
Cantor’s $600 million bet isn’t just a story about one company; it’s emblematic of a broader trend. The convergence of crypto and traditional finance is accelerating, blurring the lines between these two ecosystems.
One thing is certain: this partnership marks a turning point. Stablecoins are here to stay, and the stakes for crypto’s future have never been higher.
This Week By the Numbers 📈
Cryptocurrency 🚀
Business and Finance 💼
Economic Indicators 📊
PMI report: Manufacturing sector contracted less; new orders slightly expanded
November Jobs: Nonfarm payrolls +227k; unemployment rate 4.2%
International Relations 🌍
Legal and Regulatory ⚖️
Worth a Watch 👀
Featured last week on NYSE with the Schwab Network:
Key takeaways:
Once the BITCOIN Act is passed, BTC has the potential to reach $500k - $1M
BTC isn’t just currency - it’s property, but improved.
Have at least 10% of your net worth in crypto (unless you want to get left behind).
Top Stories 🗞️
Bitcoin at $100K: The Financial World Reacts
Here's what prominent people are saying about BTC hitting $100,000:
Donald Trump, U.S. president-elect: "CONGRATULATIONS BITCOINERS!!! $100,000!!! YOU’RE WELCOME!!!
Brian Armstrong, CEO of Coinbase: "If you bought $100 of Bitcoin when Coinbase was founded in June 2012, it would now be worth about $1,500,000. If you kept the $100 USD you'd only be able to purchase about $73 worth of goods today. Bitcoin is the best performing asset of the last 12 years, and it's still early days."
Nayib Bukele, president of El Salvador: He posted a screenshot of El Salvador’s bitcoin portfolio, then the "it ain’t much but it’s honest work" meme after Elon Musk called it impressive.
Why Biden considering pre-emptive pardons for Trump's political foes has sparked some concern
On the heels of the unprecedented pardon of his son Hunter, U.S. President Joe Biden is reportedly considering exercising that power again, this time to pre-emptively protect figures who may be targeted by the incoming Trump administration.
According to Politico, the president and his aides are debating whether to issue some kind of blanket immunity to former Republican congresswoman Liz Cheney, senator-elect Adam Schiff and Dr. Anthony Fauci, all considered political foes of president-elect Donald Trump, who some worry may attempt to prosecute the trio.
But issuing blanket pardons to individuals who have not been charged with any crimes nor specifically accused of anything criminal would be new territory and is raising some concerns about the abuse of that extraordinary power.
S Korea president apologises for martial law declaration
South Korea President Yoon Suk Yeol has apologised for declaring martial law earlier this week and has said there will not be another such order. The embattled leader is facing potential impeachment following Tuesday night's declaration, which was quickly overturned in the National Assembly.
In response to the president's address, the leader of his ruling People Power Party (PPP) told reporters that it had become impossible for Yoon to continue his normal duty. "His early resignation is inevitable," said Han Dong-hoon.
Trump picks crypto backer Paul Atkins as new Securities and Exchange Commission chair
President-elect Donald Trump said he has picked former Securities and Exchange Commissioner Paul Atkins to head the agency, according to a post he made on Truth Social on Wednesday.
Atkins served as an SEC commissioner from 2002 to 2008 and is known for his pro-business stance. He's now the CEO of consulting firm Patomak Global Partners, which has clients across the financial and cryptocurrency industries.
Atkins is also known as a strong backer of cryptocurrencies, and could help shape key regulations for an industry Trump has avidly courted, should he be confirmed by the Senate.
"Paul is a proven leader for common sense regulations," Trump said in his Truth Social post. "He believes in the promise of robust, innovative capital markets that are responsive to the needs of Investors, & that provide capital to make our Economy the best in the World. He also recognizes that digital assets & other innovations are crucial to Making America Greater than Ever Before."
Current SEC Chair Gary Gensler has announced he will step down on January 20, when Trump will be inaugurated.
UK dismantles massive money laundering operations tied to Russian oligarchs and cybercriminals
British authorities have dismantled two massive money laundering operations linked to Russia that were used by oligarchs, organized crime groups, cybercriminals and drug dealers, the National Crime Agency said Wednesday.
The international sting, known as Operation Destabilize, seized 20 million pounds ($25.4 million) in cash and cryptocurrency and arrested 84 suspects. It was revealed on the same day the U.S. announced new sanctions against several people at the top of the money laundering networks.
“For the first time, we have been able to map out a link between Russian elites, crypto-rich cybercriminals and drug gangs on the streets of the U.K.," said Rob Jones, NCA director general of operations. “We have identified and acted against the Russians pulling the strings at the very top, removing the air of legitimacy that enabled them to weave illicit funds into our economy.”
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Tatiana Koffman & Katherine MacLellan
About the Author: Tatiana Koffman
Hi there and thanks for reading! If you stumble upon my newsletter, you will notice that I write about money, economics, and technology. I hold a JD/MBA and spent my career in Capital Markets working across Mergers & Acquisitions, Derivatives, Venture Capital, and Cryptocurrencies. I write to make financial topics more accessible and create equal opportunity for the next generation of investors. Currently working as a proud General Partner at Moonwalker Capital.
(More about me 👉 here).
About the Author: Katherine MacLellan
Katherine holds an MA (Hons) in Economics and International Relations from the University of St. Andrews, and a JD from Osgoode Hall. She has been thinking and writing about Bitcoin and blockchain technology since 2012.
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