As a stablecoin, Tether (USDT) has been growing rapidly with its market cap throughout the years. It is a competitive coin to decentralized cryptocurrencies like Bitcoin and Ethereum. “The top stablecoin” has its growth in market capitalization. Speaking of the performance of USDT in 2021. It surprised investors with the market cap increase of approximately 44.9% since the beginning of the year. With the demonstration of a new all-time high of $33.334 billion, the coin climbed to another peak, pushing the demand up for the stablecoin. At first, some investors thought Tether does not stand strong enough in the bullish digital assets market. However, it proved the opposite and changed the way we look at cryptocurrencies by showing their growing potential.
Tether is the largest and the first stablecoin in the market, and the increase in popularity also gave rise to the value of Tether. When the fiat-controlized stablecoin is directly connected to the US currency, it is convenient to exchange between them swiftly. Also, Tether provides greater protection against rapid currency devaluations, which makes it a great investment to spend your USD on. Tether also has a high trading volume and great returns over recent years. Looking just at what happened at the start of the year, USDT sure has a lot of growth potential ahead. And it definitely becomes more appealing to investors while it can provide a wealth of opportunity.
If you’re not familiar with USDT investment, the following USDT guide will guide you through what is USDT and the benefits to buy it. If you’re already familiar with USDT, go ahead and start your investment!
USDT Guide: What is USDT?
Tether (USDT) was launched as the name “RealCoin” in 2014 but then rebranded it as “Tether”. Then, the first tokens were issued on 6 October 2014, on the Bitcoin blockchain. USDT is one of the leading stablecoins because its value is pegged to US Dollar at a 1-to-1 ratio. In other words, if investors hold 100 USDT, that means they also own 100 USD in value.
It is important when USDT is backed by the US government, it sets a bridge between fiat currencies and digital assets that aim to avoid volatility in price. Exchanges and companies need to have a license to hold fiat currencies, and that is why Tether came in. Investors who hold USDT can easily trade between crypto coins and fiat via digital assets exchanges, instead of going through complicated procedures via banks. Most importantly, USDT is created not only for easier buy-and-sell transactions but also for holding whenever the investors feel the market is going volatile.
How does Tether trading work?
USDT works pretty simply generally speaking. If you want to buy USDT, decide the amount you want to invest in it, then make a payment to the company Tether. When they confirmed your payment, they will transfer the funds you paid to its reserves. At the same time, they will generate the corresponding amount of USDT to you. And of course, the value of 1 USDT is equivalent to US$1.
When you earn enough from USDT and want to transfer it back to any fiat currency, the same trick applies. Go to a secure exchange, like a major digital assets exchange, sell it there and exchange it to any fiat currency you want, and done!
The whole process of buying and selling USDT can be conducted through different trustworthy crypto exchanges at any time. It only takes minutes to finish the transaction.
USDT Guide: Benefits of Holding Tether
USDT is less volatile due to its stablecoin’s features. As mentioned before, USDT is pegged to the US dollar at a 1:1 ratio. USDT has its relative stability comparing to the other traditional cryptocurrencies. It always sticks with a stable one-to-one rate with USD, which means always safe to stick with the USD value, unless big moves in the market happened then made impacts on its price.
And, the stability in USDT is a significant benefit over other traditional cryptocurrencies, especially for investors who own diversified investment portfolios. If you are buying a few digital assets at the same time, consider holding some USDT as a safe backup. Since it is unlikely to have few cryptocurrencies fall in price at the same time. So, if the price of BTC or whatever other cryptocurrencies plummeted, you at least have a stable plan B in your hand. Or you can switch Bitcoin to USDT, then keep in your USDT investment or cash it out.
While USDT is safe to invest in, you will not suffer a big loss from it. But it’s also unlikely for investors to earn big money like from Bitcoin. Therefore, as mentioned in the above USDT guide, if you are looking for a safe investment and one to earn “some” money, USDT, that may be your choice.
On the whole, USDT is a good asset for crypto beginners to explore the blockchain world. You may want to start with something safer, stabler, and more transparent. The tied relationship between USDT and the US dollar is the best advantage to invest under a stability factor, where you never go into a vital loss when you buy USDT!