Billionaire Novogratz Says Tethers Lack of Transparency Leads Him to Prefer Gemini’s GUSD
Novogratz Says Tether Didn’t Do a Good Job to Create Transparency
The billionaire and recognized investor, Mike Novogratz, has blamed Tether due to its lack of transparency to manage funds. Tether (USDT) is one of the most known and used stablecoin in the market. However, several experts have criticized this stablecoin for not having enough transparency.
During the last days, Tether has broken its historical trading range close to $1 dollar. According to the company, there is $1 dollar per USDT issued. The virtual currency was traded under $0.9 dollars in some exchanges, showing that investors could be losing faith in the token.
Stablecoins are different from other virtual currencies. Their price can fluctuate but in a very small proportion. Bitcoin, for instance, is completely different since it can have price variations of 20% or more in just a day.
Novogratz said at a conference in Frankfurt that Tether did not do a good job to create transparency around its activities in the market. And in order to regain trust, it will have to work very hard.
Although he seemed negative about Tether, he remains positive about stablecoins in the market. There are other stablecoins such as the Gemini Dollar (GUSD), TrueUSD (TUSD), Circle Dollar (USDC) and Paxos (PAX).
Goldman Sachs has announced a few days ago that it will be working with Novogratz and Galaxy Digital to invest in cryptocurrency custodian BitGo Holdings Inc.
Michael Novogratz has always defended virtual currencies and the space. This time, he answered back to Nouriel Roubini, that has attacked virtual currencies and blockchain technology.
On the matter, Novogratz commented:
“You can agree with Roubini on several points, but he is judging cryptocurrencies as if it was a PhD student. Cryptocurrencies are third- or fourth-graders, so still in need to mature.”
About the bubble experienced by the cryptocurrency market at the end of the last year, he said that it was triggered by retail investors that were speculating with the price of Bitcoin. Moreover, he mentioned that Bitcoin could become an asset class like gold or equities.
There are several companies that are launching custodian solutions for virtual currencies. Fidelity Investments, for example, launched a custody platform aimed at managing digital assets for hedge funds, family offices and other trading firms.
In the near future, the institutional-grade platform backed by the Intercontinental Exchange (ICE), Bakkt, will be launched to the market allowing companies to invest in the virtual currency market.
For Novogratz, these custodians will drive fees much lower.