Bloomberg is back to what it does best: fueling fear, uncertainty, and doubt (FUD). This time, the target is Tether, the largest stablecoin issuer in the crypto industry, and the weapon is Donald Trump's presidency.
Bloomberg’s latest op-ed predicts what will happen when Trump’s crypto-friendly policies collide with Tether’s controversial activities. But let’s call it what it is—an attack on crypto, peppered with political overtones. It’s also not the first such attack this month.
Tether acts as a digital dollar, offering traders a safe haven from volatile local currencies and other cryptocurrencies. It's supposed to be simple: for every Tether token issued, there's a real dollar in reserve. But Bloomberg doesn't believe that.
According to the editorial, Tether operates more like a fraudulent offshore bank than a transparent financial institution. Its reserves are said to include Bitcoin, risky loans, and investments that no one seems to be able to fully identify.
Add shady connections to the equation. Over the years, Tether’s name has come up in investigations involving everyone from North Korean hackers to Irish gangsters to Hamas spies. Bloomberg points to these connections when it accuses Tether of facilitating billions of dollars in and out of the criminal underworld.
Trump Makes Tether Even Bigger
Admittedly, the Trump administration has been too cozy with Tether. His pick for commerce secretary, Howard Lutnick, has a direct relationship with the stablecoin issuer through his firm Cantor Fitzgerald, which owns 5% of Tether, earns millions in custody fees, and promotes plans to lend billions of dollars in exchange for Bitcoin.
For Bloomberg, this is the beginning of the end. The more integrated Tether becomes with Wall Street, Bloomberg argues, the more dire the consequences become. Trading volume exploded after Trump’s election, with Tether moving $4.6 trillion in November alone.
Worse yet, the outlet argues that Tether’s continued growth could turn a crypto crash into a full-blown financial crisis. Imagine if Tether’s reserves—which are already filled with risky assets—collapse. Bloomberg warns that this could bring down companies like Cantor and contaminate traditional financial markets.
But wait, it gets more interesting. Bloomberg has accused Tether of being a criminal vehicle. Federal prosecutors have been eyeing the company for years, and the Treasury Department has floated the idea of sanctions that would completely remove the company from U.S. markets.
For its part, Tether has denied any wrongdoing and maintains that its reserves are fully backed. However, with Trump back in the Oval Office, Bloomberg argues that Tether could thrive in a way that makes these alleged risks impossible to ignore.
Bloomberg Criticizes Trump’s Bitcoin Reserve Plan
Bloomberg isn’t just targeting Tether as mentioned above. They’re also targeting Trump’s rumored Bitcoin reserve plan.
The idea, backed by Trump and first floated by crypto-supporter Senator Cynthia Lummis, involves the US government holding 200,000 confiscated Bitcoins — worth $20 billion — and buying another million over five years.
Supporters compare it to the country's strategic oil reserve, which stores oil for emergencies. However, Bloomberg published an editorial earlier this month calling it "the biggest cryptocurrency scam ever." The editorial argued that Bitcoin has no industrial application, no intrinsic value, and no connection to the real economy.
In the view of news agencies, it is nothing more than a speculative asset, with its value entirely dependent on market hype.
According to Bloomberg, government Bitcoin reserves would enrich early holders, inflating prices and leaving taxpayers to foot the bill. Financing the purchases would mean borrowing more money—adding to the national debt—or printing more money, fueling inflation.
And if the price of Bitcoin falls, the reserves could become worthless, leaving the government with a pile of useless digital tokens. Bloomberg also warned that Bitcoin reserves could push banks deeper 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 taxpayer-funded bailouts and bailouts. And Bloomberg didn’t miss the irony. Bitcoin is supposed to be about freedom from government and banking.
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.
Bloomberg's Bias and Political Games
The problem is: Bloomberg’s motives may have more to do with hard-line politics than the Satoshi gospel. The company, owned by billionaire Michael Bloomberg, has a history of being criticized for both.
You see, Michael is a Democrat and longtime Trump critic who hates cryptocurrencies. He even ran for president in 2020 on a platform that included a strong anti-crypto 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, they don’t tell the whole story. Tether and Bitcoin have survived worse.
The crypto industry thrives on uncertainty, and every time someone declares its demise, it gets stronger. As for Trump, he is unlikely to back down. We doubt the self-proclaimed “crypto president” has even thought about Michael Bloomberg.