How Cantor Fitzgerald is Lending Billions Against Bitcoin
Cantor is lending $2 billion against Bitcoin
Institutions are finally writing big crypto checks.
Cantor Fitzgerald ($14 billion assets under management) now has/will have three Bitcoin products: 1) a gold hedged BTC fund (not live yet), 2) a MicroStrategy-style SPAC (should be going live soon), and 3) a $2 billion Bitcoin-collateral lending desk (live now).
With Lending, Cantor is stepping into a void that has persisted since the post-FTX credit blow ups of 2022/2023.
For example, the three largest lenders pre-FTX (Genesis, BlockFi, Celsius) were lending out somewhere around $20-25 billion in aggregate. They all went bankrupt, contributing to a liquidity crunch.
With this background, below is a walk-through of what we know about Cantor’s lending desk and the underlying plumbing (as far as we can tell from public data).
Timeline?
Nov 2024 -> Press release (press leaks?) revealing Cantor in talks with Tether for $2 billion lending program.
Mar 2025 -> Anchorage and Copper announced as custodians for the program.
May 2025 -> First deals with $100M facility to FalconX and BTC-backed tranche to Maple Finance.
My assumptions on the loan structure
Note: These are my assumptions based on the data I could get my hands on and filling in the blanks based on experience.
Over-collateralized Bitcoin. Historically, spot Bitcoin lending structures have demanded ~200%+ initial margin (i.e., every $1 of USD borrowed requires $2 of Bitcoin collateral). For illustration, below is a screenshot of public data from one of Cantor’s lending partners, Maple, showing a public pool with 283% collateral ratio.
Bitcoin remains in custody with Cantor custodians (Anchorage, Copper). So, they can instantly liquidate if needed.
Crypto has massive demand for liquidity and Cantor is stepping into that void
The crypto collapses of 2022-2023 wiped out most of the major crypto lending desks, leaving a massive hole for credit demand.
This void has led to extremely expensive borrow costs during market upside volatility. Very attractive for a group like Cantor.
Anecdotally, in March 2024, during a mini crypto bull run, we saw borrow rates with crypto prime brokers in the high double digits (60%-80%!) while at the same time the funding rates on some perpetual swaps, crypto’s favorite derivative, were blowing out into the low triple digits APR.
In a similar time period, an article from Maple Finance from April 2024 mentions their stablecoin lending pools reaching 20% APR.
The Bitcoin only lending style Cantor is involved in would not have reached those levels of absurd APRs (because over-collateralized Bitcoin lending is relatively safer), but you can directionally see why it is so attractive.
Cantor’s Plumbing?
Cantor has publicly announced a few infrastructure and lending partners.
Custody and trading
Copper - A custody technology provider.
Anchorage – A custodian with a US bank charter.
Lending and yields:
Maple Finance – A DeFi rails lender. It is exciting to see Cantor jumping in with a DeFi player, *however* it doesn’t look like the publicly announced tranches were run through Maple’s public DeFi rails.
FalconX - A crypto prime broker with pre-existing relationships with funds and trading firms (borrowers).
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Closing Thoughts
Right now, this is good news for crypto. Cantor is hopefully the first major entrant of a firm with balance sheet, stepping in to close the liquidity needs in crypto.
How will this unfold as more traditional participants with large balance sheets enter the space?
The binary nature of crypto ops risk, mixed with credit can create an explosive cocktail… a custody failure can lead to instant, complete loss… then you’re left with a liability you can’t pay back, because you have permanently lost access to the funds.
A problem we see frequently with traditional firms entering crypto is an over-reliance on traditional audit and due diligence techniques, especially when it comes to crypto custody (here is an article where I went deeper into crypto’s custody problem).
This isn’t to throw stones at Cantor’s ops process – I don’t have stones to throw, because I only have the public info covered in this article. But as more firms enter the space, what will their processes look like?
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