William Quigley, co-founder of Tether and a well-known figure in the cryptocurrency world, made striking statements about the current state of the market on the “Bloomberg The Close” program.
Commenting on the recent pullbacks in Bitcoin and the cryptocurrency market in general, Quigley specifically questioned the sustainability of publicly traded crypto asset management companies and structures operating with a “Treasury model.”
Quigley stated that he never understood the logic of using specialized investment vehicles (AUM-based vehicles) to hold Bitcoin or Ethereum. Reminding that such structures generally tend to trade below their net asset value (NAV), Quigley asked, “Why would you choose these risky vehicles when there are spot Bitcoin ETFs?”
Quigley, also commenting on MicroStrategy’s strategy, stated that while he found it logical for the company to enter this business in 2020, a time when ETFs did not yet exist, he saw a significant risk in the current situation. Noting that MicroStrategy owns approximately 3% of all Bitcoin in circulation, Quigley warned that if the company were forced to sell Bitcoin in the event of a cash shortage, it could create serious pressure on the market.
Quigley, who predicts a decrease in the number of digital asset (DAT) companies in the market, told investors they should ask themselves: “Why should I buy a stake in a company that carries its own inherent risks, instead of buying the native crypto asset itself?” He stated that many of these structures do not offer a lasting investment opportunity and that a cleanup or consolidation in the market is inevitable.
Although he no longer plays an active role in Tether’s management, Quigley, evaluating the company’s strategy of shifting its reserves to gold, described it as a “smart diversification move.” He noted that gold is an asset in demand under all economic conditions, adding that backing stablecoins with strong collateral is critical for security.
*This is not investment advice.
