Howard Lutnick, Trump's pick for Commerce Secretary, is diving deeper into crypto, and investors should pay attention. Lutnick's firm, Cantor Fitzgerald, is in talks with stablecoin giant Tether (USDT-USD, Financial) to launch a $2 billion lending program where clients can secure loans by putting up Bitcoin (BTC-USD, Financial) as collateral. But here's the kicker: this isn't a one-off. The project is expected to scale into the tens of billions, fueled by Tether's massive profits and Cantor's push to dominate crypto-backed finance. If this takes off, it could shift how digital assets integrate with traditional finance, giving Bitcoin a whole new role in the lending game.
This isn't Lutnick and Tether's first rodeo. Tether already trusts Cantor to hold billions in U.S. Treasuries backing its USDT stablecoin—a partnership that earns Cantor tens of millions a year. Now, Lutnick is doubling down, with Cantor snagging a 5% stake in Tether, valued at $600 million. As he gears up for his Commerce Department role, this crypto connection hints at the Trump administration's openness to digital assets. Word on the street is they're even considering creating a crypto-specific advisory post in the White House, which could set the stage for a more crypto-friendly regulatory environment in the U.S.
But let's not sugarcoat it: Tether brings its share of baggage. Despite a $132.7 billion market cap, Tether has faced heat over alleged regulatory violations and questions about its reserves, which the company denies. Pair that with U.S. regulators cracking down on crypto lenders, and the road ahead is anything but smooth. Still, if Lutnick pulls this off, it's not just a win for Cantor and Tether—it's a milestone for the entire crypto ecosystem. For investors watching the crypto space, this is a story you can't afford to ignore.
