Cantor Fitzgerald Acquires 5% Stake in Tether Amid Expanding Bitcoin-Backed Lending Initiatives

Cantor Fitzgerald, a well-known financial services firm in the U.S., is expanding its partnership with Tether, a major player in the digital asset space. Tether is the issuer of the world’s largest stablecoin.

Reports say that Cantor Fitzgerald has agreed to buy a 5% stake in Tether. This deal is part of a larger collaboration that includes Bitcoin-backed lending initiatives.

The talks around this acquisition wrapped up in 2023, valuing the 5% stake at about $600 million. This partnership is expected to give Tether some strategic advantages, especially with Cantor Fitzgerald’s CEO, Howard Lutnick, taking on a new role as Secretary of Commerce under President-elect Donald Trump.

Market analysts believe Lutnick’s nomination could lead to increased regulatory support for Tether. This comes as Tether has faced scrutiny over potential violations of sanctions and anti-money laundering regulations, which the company denies. However, Lutnick has promised to resign from his positions at Cantor once he is confirmed by the Senate.

Beyond the ownership stake, Tether is set to support Cantor Fitzgerald’s Bitcoin lending program. This is a multi-billion-dollar initiative aimed at offering loans backed by Bitcoin, initially funded with $2 billion, with plans for significant growth in the future.

Currently, Cantor Fitzgerald is already a key partner for Tether. They reportedly manage a large portion of Tether’s $134 billion reserves in U.S. Treasury bills.

As Cantor Fitzgerald deepens its involvement with Tether, the firm has been actively minting tokens. On November 24, blockchain analytics platform Lookonchain reported that Tether minted an additional $3 billion USDT. This brings the total minted since November 8 to $13 billion, pushing the total supply of USDT to around $132 billion.

This increase in USDT supply likely reflects a growing demand for stablecoins. These coins are often used to hedge market positions or facilitate crypto transactions without converting to fiat currency. This influx of liquidity could help reduce volatility and improve price stability across the digital asset market.

This surge in USDT supply coincides with a broader market rally led by Bitcoin and other cryptocurrencies like Dogecoin and Solana. It signals a renewed confidence among investors in the crypto ecosystem.