Wells Fargo

‘I’m a big fan’: Cantor Fitzgerald CEO praises Tether and Bitcoin

Cantor Fitzgerald has been managing Tether’s now $90 billion Treasury portfolio since late 2021.

Howard Lutnick, the CEO of Wall Street firm Cantor Fitzgerald, has praised USDT stablecoin issuer Tether, describing himself as a “big fan” of the firm.

“I’m a big fan of this stablecoin called Tether…I hold their treasuries. So I keep their treasuries, and they have a lot of treasuries,” Lutnick said in a Dec. 11 interview with CNBC.

“They’re over $90 billion now, so I’m a big fan of Tether,” the Cantor Fitzgerald CEO said.

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Bitcoin market cap grows 60% in 2023 as top Wall Street banks lose $100B

Bitcoin has decoupled from stocks and continues to rise 10 years after the Cyprus banking crisis coincided with a BTC price boom.

The market capitalization of Bitcoin (BTC) has added $194 billion in 2023. Its 66% year-to-date (YTD) growth vastly outperforms top Wall Street bank stocks, particularly as fears of a global banking crisis are rising.

BTC market cap daily performance chart. Source: TradingView

Moreover, Bitcoin has decoupled from United States stocks for the first time in a year, with its price rising about 65% versus S&P 500’s 2.5% gains and Nasdaq’s 15% decline in 2023. 

SPX and NDAQ YTD performance vs. BTC/USD. Source: TradingView 

Wall Street banks lose $100B in 2023

The six largest U.S. banks — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Morgan Stanley and Goldman Sachs — have lost nearly $100 billion in market valuation since the year’s start, according to data gathered by CompaniesMarketCap.com.

Bank of America’s stock is the worst performer among the Wall Street banking players, with a nearly 17% YTD drop in valuation. Goldman Sachs trails with an almost 12% YTD decrease, followed by Wells Fargo (9.74%), JPMorgan Chase (6.59%), Citi (3.62%) and Morgan Stanley (0.84%).

Wall Street banks YTD performance. Source: TradingView

U.S. bank valuations have slid amid the ongoing U.S. regional banking collapse. That includes the announcement last week that Silvergate, a crypto-friendly bank, was closing its doors, followed by regulators’ subsequent takeover of Signature Bank and Silicon Valley Bank.

Related: Breaking: SVB Financial Group files for Chapter 11 bankruptcy

The crisis further expanded with the near-collapse of First Republic Bank, which was saved at the last moment through a $30 billion combined injection by Wells Fargo, JPMorgan Chase, Bank of America and Citigroup — among others.

Cyprus and Greece deja vu?

The rise of Bitcoin in the face of a growing U.S. banking crisis is similar to how it reacted during banking collapses in Cyprus and Greece.

BTC’s price grew by up to 5,000% amid the Cyprus financial crisis in 2013, prompted by the exposure of Cypriot banks to overleveraged regional real-estate companies.

BTC/USD performance during Cyprus banking crisis. Source: TradingView

The situation was so dire in March 2013 that Cyprus authorities closed all banks to avoid a bank run.

When Greece faced a similar crisis in 2015 and imposed capital controls on citizens to avoid a bank run, Bitcoin’s price gained 150%. 

BTC/USD performance during the Greece banking crisis. Source: TradingView

“Fears over the stability of the banking system, along with declining real interest rates, creates a good environment for Bitcoin to rebound,” commented Ilan Solot, co-head of digital assets at London broker Marex, adding that the crypto “is seen by some investors as a hedge against systemic risks.“ 

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Ripple CEO compares Wells Fargo billions mismanagement with FTX collapse

One of the biggest banks in America has once again paid a billion-dollar fine for the illegal treatment of its customers.

Amid the heated-up news steam about the FTX drama, Ripple CEO Brad Garlinghouse has tried to turn the public’s attention to another case regarding the misdeeds of traditional finance. A $3.7 billion fine for mismanagement at Wells Fargo bank was treated as, in Garlinghouse’s words, “barely a blip on the radar.”

Ripple CEO expressed his concern with the lack of public attention to the Wells Fargo case in his tweet on Dec. 21:

On Dec. 20, the United States Consumer Financial Protection Bureau (CFPB) ordered Wells Fargo to pay more than $2 billion in redress to consumers, as well as a $1.7 billion civil penalty. According to the CFPB, the bank’s conduct led to billions of dollars in financial harm to its customers and cost thousands of customers their vehicles and homes. 

Related: Alameda’s Caroline Ellison escapes potential 110-years prison term via plea deal

Over several years, Wells Fargo systematically charged its customers with ill-assessed fees and interest charges on auto and mortgage loans, unlawful surprise overdraft fees and incorrect charges to checking and savings account. There are 16 million affected customers in the case.

In his statement, CFPB director Rohit Chopra said:

“Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families. The CFPB is ordering Wells Fargo to refund billions of dollars to consumers across the country. This is an important initial step for accountability and long-term reform of this repeat offender.”

It wasn’t the first time one of the biggest banks in the United States broke the law and harmed customers. In 2016, Well Fargo — which has a market capitalization of $156.6 billion — was fined $185 million by CFPB for creating millions of fraudulent savings accounts on behalf of its clients without their consent. In 2020, Wells Fargo agreed to pay $3 billion to resolve its potential criminal and civil liability for this activity.