Michael Novogratz, a known cryptocurrency investor, and Galaxy Holdings CEO, has expressed his views about the problem of the lack of transparency that Tether, the first stable coin in the cryptocurrency market, has achieved to spread. While he thinks that stable coins are really important for the movement of the market, he clearly prefers more regulated and transparent stable coins, now that there are various of its kind.
Michael Novogratz Vs Tether
Michael Novogratz is a veteran investor and cryptocurrency expert that has a certain knowledge about cryptocurrency trading. In a recent speech at a conference in Frankfurt, he expressed his negative views about the behavior that Tether, the company behind the USDT cryptocurrency, has had till now regarding their customers.
He declared bluntly: “I think Tether didn’t do a great job in terms of creating transparency”. Indeed, the Tether company has not been open to audit its claims that every USDT token is backed up by a dollar deposited in a bank account somewhere.
More so, since the last news of their auditor being fired due to “excruciating detailed procedures”, there has not been a true audit for Tether since last year, a thing that is quite worrisome for some investors in the grand scheme of things.
Stablecoins Are Important
Michael does understand the importance of stable coins like Tether for the market. By their nature, stable coins are the perfect currency to save your earning on a good bullish afternoon, while not being affected by the price.
“The concept of stable coins make sense,” according to Michael. Stable coins come to fill an important role in the market. While being designed to maintain their price, their transactional value is higher than the value of bitcoin, because bitcoin’s value varies every day.
Nobody wants their monetary value to disappear overnight, and sadly bitcoin and other traditional cryptocurrencies do behave in this way. With stablecoins, merchants don’t have to worry about this issue.
The Tether Debacle And New Alternatives
Last week, Tethet lost more than 10% of its original price, unbalancing the business and creating an artificial premium for bitcoin in other states.
The reason for this huge selloff was, as Michael said, that lack of compelling information and also a fake announcement of the delisting of Tether by Binance, one of the biggest cryptocurrency exchanges, that turned out to be fake news.
But Michael advises flocking to new stablecoins like the one issued by the exchange property of the Winklevoss Twins, the Gemini Dollar. Being approved by the regulators of the city of New York, and in the process of creating volumes high enough to really transact high amounts without having liquidity issues, it seems like the future of stablecoins is here to stay.