We avoided the subject of USDT cryptocurrency mainly because of the controversy that arouses around. However, important topics can not be postponed indefinitely. Currently, the multi-billion dollar cryptocurrency market is based on the tighter liquidity provided by the mysterious Tether cryptocurrency. How did it happen that the role of traditional, fiat currency is played by a completely non-traditional, synthetic cryptocurrency and the market accepts it calmly?
What is the Tether cryptocurrency?
Tether (USDT) is a cryptocurrency that is designed to provide liquidity to the cryptocurrency market. The intention of the creators is to maintain the value of 1 US dollar. Although Tether belongs to Tether Limited, it is impossible to deny connections with one of the largest cryptocurrencies, Bitfinex.
How does Tether cryptocurrency work?
The value of $1 is maintained by manipulating liquidity. When the demand for this financial instrument is significant, the supply of Tethers increases, thanks to which the investors’ willingness to buy is satisfied. Conversely, if the demand of USDT decreases, the Tethers are pulled away from the market along the rhythm of selling a safe Tetra and buying more risky cryptocurrencies. All this effort is performed so that the value of USDT will not exceed $1 in any direction.
USDT cryptocurrency is by definition secured with real American dollars, but there is virtually no evidence of this. Due to the connection with the dollar, in December 2017 U.S. Commodity Futures Trading Commission has requested the company to audit its deposits. At the time of writing, at the end of September 2018, proof of this claim did not materialize, so investors are not sure about the safety of storing funds in Tether.
Where can you buy Tether?
Tether cryptocurrency can be purchased at many exchanges, not only on the markets related to Tether. The largest stock exchanges, such as Binance or the passive income cryptocurrency market KuCoin, are using USDT successfully as an alternative to traditional currencies. European exchanges, such as BitBay, prefer to keep accounts in euro and dollars without using Tether.
When should you buy Tether cryptocurrency?
Without a glass ball, you won’t know when to buy the Tether cryptocurrency, but you certainly know when it is worth having it. Whenever the cryptocurrency market drops, storing capital in the Tethers will allow later redemption at a profit. For example, the purchase of Tethers when Bitcoin was worth almost $ 20k would be a great decision that would allow buying more than three times as many cryptocurrencies after several months of rate decline. Some investors are anxiously looking at declines in the market, for example by checking the falling capitalization on coinmarketcap. Reduced investors’ demand on USDT will force crypto exchanges to buy Tethers themselves in order to maintain it’s one-dollar value. What will happen if they decide not to do it, or worse, they will run out of money?
Do you want to switch your cryptocurrency portfolio from tokens to Tethers? Exchange with the lowest commission, such as 0.15% for buy and sell transaction is Binance.
What are advantages of Binance market?
- no necessity of verification,
- simple interface,
- lowest commissions (0.075%),
- availability of rare cryptocurrencies (including IOTA, Tron, Ripple and many more).
Make sure you have moved coin of your choice to a safe wallet, after performing a transaction.
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