Billionaire investor and entrepreneur, as well as one of the most vocal cryptocurrency advocates Mike Novogratz, has said Tether’s lack of transparency is the leading reason behind the stablecoin’s recent troubles, Bloomberg reports.
Being a stablecoin, Tether’s price has remained fixed at $1. Recently, however, the coin has fluctuated in its price, even dropping as low as $0.91, leading to investors losing faith in the token as questions arise regarding the legitimacy of tether’s claim that each coin is backed by a dollar in its bank account.
“I think Tether didn’t do a great job in terms of creating transparency," Novogratz, the Galaxy Digital Holdings Ltd. founder, said Wednesday at a conference in Frankfurt.
“The concept of stablecoins makes sense,” he added, saying they have more of a transactional character than other cryptocurrencies, like Bitcoin, for example. However, his preference would be the recently-launched Gemini Dollar.
Goldman Sachs announced yesterday that it would be teaming up with Novogratz’s Galaxy to invest in cryptocurrency custodian BitGo holdings Inc. Read about it here.