Tether (UDST) is responsible for its own recent struggles, according to billionaire investor Mike Novogratz, who said at a conference in Frankfurt earlier this week that the eponymous company behind the dollar-pegged stablecoin has failed to create transparency and now needs time to regain people’s trust.
The Tether price experienced an unusual slump on Monday, falling to $0.925, its lowest level since early February. The coin has historically traded around $1, as each USDT token is supposedly backed by one US dollar. However, there have been doubts over whether this actually the case.
“I think Tether didn’t do a great job in terms of creating transparency,” operating off-shore, Novogratz said on Wednesday, as quoted by Bloomberg.
Nevertheless, Novogratz defended the broader concept of stablecoins, saying that it “make sense” and that such tokens had more of a transactional character than, for example, Bitcoin (BTC). However, he also said that he would prefer the recently introduced Gemini Dollar, as it had State Street as a US-based correspondent bank.
The Gemini Dollar was among a number of stablecoins that benefited greatly following USDT’s slump. Industry website Coindesk reported on Wednesday that trading volume for GUSD pairs on top 10 exchange Bibox had roughly doubled, while the exchange’s USDT volume had fallen some 70% in the wake of the tether turmoil.
During the Frankfurt event, Novogratz also addressed recent criticism from economist Nouriel Roubini who in a recent hearing before a US Senate committee described crypto as “the mother of all scams and (now busted) bubbles”.
“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,” Novogratz said, adding that further development of blockchain infrastructure or custodians for digital currencies would eventually see the sector mature.