Cantor Fitzgerald CEO Howard Lutnick Expressed Support For BTC & Said He Is A ‘Big Fan’ Of Tether’s USDt Stablecoin - We Discuss The Comments In This AM’s Note
Lutnick began his remarks about crypto by saying ‘let’s be very specific, [BTC], just [BTC].’ According to Lutnick ‘these other coins’ are ‘kind of make believe,’ but the CEO added that ‘maybe Ethereum is OK.’ The CEO goes on to explain BTC’s having cycles that take place every four years, with the next one taking place in ~April, and that every time this event takes place the token ‘does well.’ Lutnick then characterizes BTC as ‘just a speculative thing’ and compares it to ‘Tesla stock,’ asking ‘why is Tesla Tesla? The answer is because everyone buys it and it goes up.’ Lutnick suggests that ‘its not the fundamentals of Tesla’ that drives its performance.
When Lutnick is asked why he is attracted to these qualities, Lutnick points to the halving, and deficits. According to him, this creates demand for assets like BTC, but also stablecoins. At this point, Lutnick switches his focus towards USDt and describes himself as a ‘big fan’ of Tether. He explains that ‘I keep their treasuries, and they have a lot of treasuries. They are over [USD 90B] now.’ USDt has a market cap just over USD 90B. According to Tether, US treasuries, overnight reverse repurchase agreements, and money market funds represent USD 75B of the stablecoin’s total USD 90B liabilities.
In February of this year, the WSJ reported that Cantor Fitzgerald was managing USD 39B bond portfolio for Tether. According to Tether, the firm at the time had a market cap of USD ~69B and USD 39B in US treasuries.
Takeaway: For BTC’s most ardent supporters, Lutnick comments regarding BTC will fall short of the endorsements expressed by Paul Tudor Jones or Stanley Druckenmiller. However, Lutnick does endorse aspects of BTC’s ongoing bull thesis centered around the halving and macro considerations. In regards to USDt and Tether, Lutnick’s comments are further validation of the firm, which has often been the subject of baseless speculation regarding the stablecoin’s reserves.
CRYPTO HEADLINES
The Financial Accounting Standards Board (FASB) finalized rules surrounding the treatment of BTC on corporate treasury balance sheets. The rules, which take effect in December 2024, allow companies to report BTC holdings at their current market value. MicroStrategy founder and chairman Michael Saylor said the rules ‘will facilitate the adoption of $BTC as a treasury reserve asset by corporations worldwide.’ - link - @Cointelegraph
Blockstream will issue a second series of ‘BASIC’ notes to acquire BTC mining hardware. The first series of BASIC notes, which are issued on Blockstream’s BTC ‘sidechain’ Liquid, raised over USD 5M to purchase Antminer S19k Pro ASIC miners. The issuance is being facilitated in partnership with Luxembourg-based security token platform STOKR. - link - @Blockstream
Blockchain-based payments startup Fnality is testing a digital payment system supported by the Bank of England. The company is working with Lloyds Banking Group, Banco Santander and UBS, among others, on the effort. According to Fnality, the platform ‘brings together for the first time the safety and institutional quality of central bank funds in a systemic wholesale payment system with the innovative functionality and resilience of blockchain technology.’ - link - @TheBlock
S&P has created a risk scale for stablecoins. The rating agency included eight stablecoins which are ranked from 1-5 following an assessment of ‘quality risks, including credit, market value, and custody risks.’ - link - S&P
JPMorgan analysts believe ETH could outperform BTC in 2024, according to a research note cited by The Block. The analysts referenced the network’s upgrade EIP-4844, expected to happen in the first half of the year, as a catalyst for the token. They also speculated that a potential BTC spot ETF and the BTC network’s halving in 2024 are already priced into the price of BTC. - link - @TheBlock
Crypto financial services firm Blockchain.com plans to increase its headcount and expand into new regions next year. In an interview, CEO Peter Smith said the company could increase its workforce by up to 25%, and is eyeing regions such as Turkey and Nigeria. Last month, Blockchain.com raised USD 110M in a Series E round. The raise placed the company’s valuation at less than half of the USD 14B it was assigned in its prior raise. - link - @Bloomberg
Coinbase (NASDAQ: COIN) will list BTC and ETH spot pairs against USDC on its international derivatives platform. The offshore platform launched in May, initially listing BTC and ETH perp contracts and aimed at catering to institutional traders. - link - @COIN
Goldman Sachs head of digital Mathew McDermott said he believes trading volumes for ‘blockchain-based assets’ will increase significantly over the next 1-2 years. Speaking to Reuters, McDermott added that the bank is focused on digital assets beyond crypto, such as tokenized securities including bonds. - link - @Reuters
TOP ARTICLES
OPEN-SOURCE RESEARCH / LONG-READ OF THE DAY
‘Flatcoins’ Are The Way Forward, Nouriel Roubini for FT, December 5, 2023
Long-time crypto and BTC critic Nouriel Roubini introduces the concept of 'flatcoins,' assets that 'merge the benefits of blockchain and fintech to provide a hedge against inflation while doing social good.'
CRYPTO MULTIMEDIA
SEC Chair Gensler On New Hedge Fund Rules, Crypto Regulation, Bloomberg, December 13, 2023
SEC Chair Gary Gensler discusses a range of regulatory topics, including crypto.
CHART OF THE DAY
USDt trading against the Argentine peso has reached record high volume on Binance. The country has implemented a 50% devaluation of its currency…
About FRNT Financial
FRNT: TSXV is an institutional capital markets and advisory platform focused on digital assets. FRNT aims to bridge the worlds of traditional and web-based finance. Business lines include deliverable trading services, structured derivative products, merchant banking, advisory, consulting and principal investments.