Bloomberg Says Tether Will Collapse Due to President Trump's Involvement

Bloomberg returns to what they do best: fueling fear, uncertainty, and doubt (FUD). This time, the target is Tether, the largest stablecoin issuer in the cryptocurrency industry, and the weapon is Donald Trump's presidential term. Bloomberg's latest editorial predicts what will happen when Trump's cryptocurrency-friendly policies collide with Tether's controversial activities. But let's call this what it is - an attack on cryptocurrency, peppered with political undertones. This is also not the first attack this month. Tether operates as a digital dollar, providing traders with a safe haven from unstable local currencies and other volatile cryptocurrencies. It is supposed to be straightforward: for every Tether token issued, there will be an actual dollar in reserve. But Bloomberg doesn't believe that. According to the essay, Tether operates more like a fraudulent offshore bank than a transparent financial organization. Its reserves are said to include Bitcoin, risky loans, and investments that seem impossible to fully identify. Add opaque connections to the formula. In recent years, the name Tether has appeared in investigations involving everyone from North Korean hackers to Irish organized crime gangs and Hamas spies. Bloomberg highlighted these connections when accusing Tether of allowing billions of dollars to move in and out of the criminal underworld. Trump makes Tether even bigger It must be admitted that the Trump administration has been too close to Tether. The person he chose as Secretary of Commerce, Howard Lutnick, has a direct relationship with the stablecoin issuing entity through his company Cantor Fitzgerald, which owns 5% of Tether, earning millions of dollars in custodial fees and promoting plans for borrowing billions of dollars to exchange for Bitcoin. For Bloomberg, this is the beginning of the end. Bloomberg argues that the deeper Tether integrates with Wall Street, the higher the likelihood of catastrophic consequences. Trading volume exploded after Trump's election, with Tether alone moving $4.6 trillion in November. To make matters worse, this news agency believes that the continuous growth of Tether could turn a cryptocurrency collapse into a full-fledged financial crisis. Just imagine if Tether's reserves - already filled with risky assets - collapse. Bloomberg warns that this could drag companies like Cantor down and spread to traditional financial markets. But wait, there's more. Bloomberg accuses Tether of being a criminal tool. Federal prosecutors have been eyeing the company for years, and the Treasury Department has floated the idea of ​​sanctioning it entirely out of the U.S. market. As for myself, Tether denies any wrongdoing and asserts that its reserves are fully supported. However, with Trump returning to the Oval Office, Bloomberg argues that Tether may develop in a way that these alleged risks cannot be ignored. Bloomberg criticizes Trump's Bitcoin reserve plan Bloomberg is not only targeting Tether as mentioned above. They are also targeting the rumored Bitcoin reserve plan of Trump. This idea, supported by Trump and endorsed by Senator Cynthia Lummis, involves the U.S. government holding 200,000 seized Bitcoins - worth $20 billion - and buying an additional one million Bitcoins over the next five years. Supporters compare it to the country's strategic oil reserves, where oil is stored for emergencies. However, Bloomberg published an editorial earlier this month calling it the "largest cryptocurrency scam ever". The editorial argues that Bitcoin has no industrial application, no intrinsic value, and no connection to the real economy. According to news agencies, it is nothing more than a speculative asset, whose value is entirely dependent on market volatility. According to Bloomberg, the government's Bitcoin reserves will enrich early holders, inflate prices, and impose consequences on taxpayers. Funding the purchase transactions will mean borrowing more money—increasing national debt—or printing more money, fueling inflation. And if the price of Bitcoin drops, the reserves could become worthless, leaving the government stuck with a pile of useless digital tokens. Bloomberg also warns that Bitcoin reserves could push banks further into cryptocurrencies. Imagine banks lending dollars against Bitcoin collateral, only to panic when the price drops. The media giant said this could lead to another financial crisis, complete with bailouts and rescues funded by taxpayer money. And Bloomberg also did not overlook this irony. Bitcoin is said to be about freedom from government and banks. But here we are, with centralized financial institutions lobbying for government subsidies and support. Bloomberg calls it the ultimate betrayal of Bitcoin's original vision. And that's not wrong. The bias and political game of Bloomberg The problem is: Bloomberg's motive may be more about politics than Satoshi's gospel. The company, owned by billionaire Michael Bloomberg, has a history of criticizing both. You see, Michael is a long-time Democratic Party member and a critic of Trump, hating cryptocurrencies. He even ran for president in 2020 on a platform including a strong anti-cryptocurrency campaign. So it's no surprise that Bloomberg's editorial board is now aggressively pursuing Trump's cryptocurrency policy. But while Bloomberg's warnings may scare some people, they don't tell the whole story. Tether and Bitcoin have survived worse. The cryptocurrency industry has grown stronger due to its uncertainty, and whenever someone declares its collapse, it becomes even stronger. For Trump, he has no ability to retreat. We doubt that the self-proclaimed "crypto president" even thinks of Michael Bloomberg.