Bloomberg is back to doing what he does best: fueling fear, uncertainty and doubt (FUD). This time, the target is Tether, the cryptocurrency industry’s largest stablecoin issuer, and the ammunition is Donald Trump’s presidency.
The latest from Bloomberg editorial predicts what will happen when Trump’s pro-cryptocurrency policies collide with Tether’s controversial practices. But let’s call this what it is: an attack on cryptocurrencies, with a political undertone. It’s not the first of this month either.
Tether acts as a digital dollar, providing traders with a safe haven from unstable local currencies and other volatile cryptocurrencies. It’s supposed to be simple: for every Tether token issued, there is one real dollar in reserve. But Bloomberg doesn’t believe it.
According to the editorial, Tether operates more like an unreliable offshore bank than a transparent financial institution. Their reserves reportedly include Bitcoin, risky loans, and investments that no one seems to fully identify.
Add murky associations to the formula. Over the years, Tether’s name has come up in investigations involving everyone from North Korean hackers to Irish gangsters to Hamas operatives. Bloomberg points out these links by accusing Tether of allowing billions of dollars to flow in and out of the criminal underworld.
Trump makes Tether even bigger
It’s true that the Trump administration is already too comfortable with Tether. His pick for Commerce Secretary, Howard Lutnick, has direct ties to the stablecoin issuer through his company Cantor Fitzgerald, which owns a 5% stake in Tether, earns millions in custody fees and is pushing plans to lend thousands. of millions against Bitcoin.
For Bloomberg, this is the beginning of the end. He argues that the more Tether integrates with Wall Street, the greater the chances of a catastrophic crash. Trading volume skyrocketed after Trump’s election, with Tether moving $4.6 trillion in November alone.
What’s worse, the media outlet maintains that Tether’s continued growth could turn a cryptocurrency crash into a full-blown financial crisis. Imagine if Tether’s reserves, already full of risk assets, collapsed. Bloomberg warns that this could drag down companies like Cantor and infect traditional financial markets.
But wait, it gets juicier. Bloomberg accuses Tether of being a tool for crime. Federal prosecutors have had their eyes on the company for years, and the Treasury Department has floated the idea of sanctions to remove it from U.S. markets entirely.
Tether, for its part, denies any wrongdoing and insists its reserves are fully backed. Still, with Trump back in the Oval, Bloomberg argues that Tether could flourish in a way that makes these supposed risks impossible to ignore.
Bloomberg criticizes Trump’s Bitcoin reserve plan
Bloomberg is not only targeting Tether, as mentioned above. They also have unfinished business with Trump’s rumored Bitcoin reserve plan.
The idea, backed by Trump and first created by cryptocurrency supporter Senator Cynthia Lummis, involves the US government holding onto 200,000 confiscated Bitcoins, worth $20 billion, and buying another million in five years.
Supporters compare it to the country’s strategic petroleum reserve, which stores oil for emergencies. However, Bloomberg published a editorial earlier this month he called it “the biggest crypto scam yet.” He maintains that Bitcoin has no industrial use, no intrinsic value, and no connection to the real economy.
In the eyes of the media, it is nothing more than a speculative asset, whose value depends entirely on market hype.
According to Bloomberg, a government reserve of Bitcoin would enrich early holders, inflate the price and leave taxpayers holding the bag. Financing the purchases would mean borrowing more money (which would increase the national debt) or printing more money, fueling inflation.
And if the price of Bitcoin crashes, the reserve could end up worthless, leaving the government with a pile of useless digital tokens. Bloomberg also warns that a Bitcoin reserve could push banks to delve deeper into cryptocurrencies. Let’s imagine that banks lend dollars collateralized by Bitcoin, only to panic when prices drop.
The media giant says this could lead to another financial crisis, with taxpayer-funded bailouts and bailouts. And the irony is not lost on Bloomberg either. Bitcoin was supposed to be about freedom from governments and banks.
Yet here we are, with centralized financial institutions pushing for subsidies and government support. Bloomberg calls it the ultimate betrayal of Bitcoin’s original vision. And it’s not bad.
Bloomberg’s prejudices and political games
Here’s the thing, though: Bloomberg’s motivation might have more to do with bitter politics than the gospel of Satoshi. The company, owned by billionaire Michael Bloomberg, has a history of attacking both.
You see, Michael is a Democrat and a long-time Trump critic who hates cryptocurrencies. He even ran for president in 2020 on a platform that included an intense anti-cryptocurrency campaign.
It is therefore no surprise that Bloomberg’s editorial board is now pursuing Trump’s crypto policies with a vengeance. But while Bloomberg’s warnings may scare some, they don’t tell the whole story. Tether and Bitcoin have survived worse situations.
The crypto industry thrives on uncertainty and every time someone declares its demise, it comes back stronger. As for Trump, he is not likely to back down. We doubt the self-proclaimed “crypto president” will ever even think about Michael Bloomberg.
