Tether co-founder William Quigley said that Bitcoin (BTC) could suffer a deeper slide if corporate holder ‘Strategy’ is ever pushed to sell a significant part of its stash.
In an interview with Bloomberg on the latest Bitcoin sell-off, Quigley said one of his main concerns is what happens if Strategy, which he said controls roughly 3% of all outstanding Bitcoin, must sell bitcoin to cover its commitments.
“If they were ever in a situation where they needed to sell, it would put a significant damper on the price of Bitcoin,” he said, adding that such a move could weigh on both market levels and investor sentiment at a time when prices are already under pressure.
Quigley praised the way Strategy structured its bond financing, saying the obligations are ultimately backed and collateralized by Bitcoin rather than by the operating company. That approach, he argued, limits the direct risk to the business if lenders seize the collateral.
Even with that structure, the company now faces an uncomfortable choice if it needs fresh cash, as it can sell part of its Bitcoin holdings to raise liquidity and make bond payments, or it can issue new shares.
Selling coins would undercut the very investment story that attracts its shareholders, while selling equity would dilute them. “They are both bad choices, they are not great,” he said.
Crypto Vehicles Lose Their Appeal In the ETF Era
Quigley was skeptical about listed crypto vehicles that offer indirect exposure to digital assets. He said he never liked asset-under-management products that simply hold coins and trade in the stock market, because they often drift below the value of the tokens they own.
In his view, those structures may have had a role when it was difficult for investors to buy and store Bitcoin or Ether, but that argument has faded since the arrival of spot exchange-traded funds.
I never understood why someone would want to hold the crypto in a vehicle that we all know tends to trade below its net asset value,” he said. “Why should I hold your stock with all of the idiosyncratic risks that your stock has versus owning the native crypto itself.
Fewer Crypto Vehicles Expected to Survive
When asked about the wider landscape for listed crypto firms, Quigley said he expects the number of such companies to shrink. Some could merge, while others may simply shut down rather than continue as thinly traded proxy plays, he added.
“There will be fewer of them tomorrow than there are today,” he said, adding that there is “not a compelling need” for many of the specialized crypto stocks that have come to market.
Quigley Calls Tether Gold Purchases a Diversification Move
Quigley was also asked about Tether’s recent decision to buy high amounts of gold, a move some investors say makes the company look like a new central bank in the bullion market.
He said the strategy made sense for a firm that issues tokens backed by reserves. In his view, stablecoins are simply crypto assets that are collateralized with instruments users expect to keep their value, such as the United States dollar.
“Gold is a good kind of diversification strategy,” he said, adding that the metal tends to attract demand in both strong and weak economic conditions. “In good times and bad times, gold is always something people want. So I think it is a good thing to do.”
