Cantor Fitzgerald, led by Trump's Commerce Secretary nominee Howard Lutnick, is partnering with Tether to launch a Bitcoin-collateralized lending program starting at $20 billion. The service aims to provide liquidity for Bitcoin holders while expanding to hundreds of billions in scale.
Bitcoin-Collateralized Loans: A New Wall Street Frontier
The Bloomberg report reveals Cantor Fitzgerald's innovative approach:
- Clients borrow USD using Bitcoin as collateral
- Initial $20B program expected to grow exponentially
- Tether Investments funding the initiative through profits from recent years
Key benefits:
👉 Secure liquidity without selling Bitcoin holdings
- Maintain exposure to potential BTC appreciation
- Access traditional finance through crypto assets
Deep Ties Between Cantor and Tether
The partnership builds on existing relationships:
- Since 2021: Cantor manages Tether's Treasury portfolio ($102.5B in Q3 2024)
- 2023: Cantor acquired 5% of Tether at $600M valuation
- Potential political support under Trump administration
Leadership Transition Plans
Howard Lutnick preparing for Commerce Secretary role:
- Son Brandon Lutnick (former Tether Switzerland intern) likely successor
- Brandon's experience includes Tether Gold's $660M gold-backed token project
Pro-Crypto Trump Administration Takes Shape
The nomination signals broader policy shifts:
- Howard Lutnick: Bitcoin advocate ("digital gold" proponent)
- Treasury nominee Scott Bessent: Supports Bitcoin national reserves
- Potential SEC acting chair Hester Peirce ("Crypto Mom")
Industry implications:
👉 How institutional adoption is reshaping crypto markets
- Regulatory clarity for crypto assets
- Increased traditional finance integration
- Political support for blockchain innovation
FAQ: Bitcoin Collateralized Lending Explained
Q: How does Bitcoin-collateralized lending work?
A: Borrowers lock BTC as collateral to receive USD loans, maintaining crypto exposure while accessing liquidity.
Q: What's the loan-to-value ratio?
A: While specifics aren't released, typical crypto lending platforms offer 50-70% LTV to account for volatility.
Q: Why partner with Tether?
A: Tether's $125.5B reserves provide stable funding, while Cantor brings traditional finance expertise.
Q: When will services launch?
A: Initial $20B program expected soon after regulatory approvals, with scaling planned throughout 2025.
Q: Who can access these loans?
A: Institutional clients initially, with potential expansion to accredited investors.
Q: How does this impact Bitcoin's price?
A: Increased utility as collateral could reduce sell-pressure while demonstrating institutional confidence.