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What Is Tether (USDT)? Should You Invest In USDT and Where To Buy It?

Last Updated July 28th 2021
16 Min Read

Smart people are investing in cryptocurrencies now more than ever. Though the market is still very volatile, there are many wonderful things about trading and investing in cryptos. Of course, the primary attraction is that they can appreciate very fast and make investors rich within a short time. Long-term investments are even more profitable when you choose the right coin. 

Bitcoin and Ethereum may be the most popular cryptocurrencies, but they are not the only ones that can make you rich. In this post, we are going to focus on a special coin, Tether (USDT). So what is Tether? Should you invest in Tether? Where can you buy Tether USDT?

We understand that you may have several questions about Tether and how best to invest in the coin. Here, we will answer some of the most important questions to help you make an informed decision in the end. It is important that you read every part of the post attentively to understand if Tether is a good investment for your portfolio.

Content:

What Is Tether USDT?

Tether is a controversial blockchain-based cryptocurrency that is pegged to the U.S. dollar (USD). It is also referred to as USDT, an acronym that denotes its relationship to the US dollar and also serves as its trading symbol. It was previously called Realcoin before being rebranded to Tether USDT. 

Tether belongs to a category of coins called Stablecoins because of the role it plays in the cryptocurrency market. Unlike other digital currencies, its price does not fluctuate. Rather, it equals the value of USD at all times, thanks to the backing of the circulating supply of USDT with fiat currency assets held in reserve. 

Tether USDT has been described as a sort of compromise between regular cryptocurrencies and fiat currencies. It is respected as an important digital currency by most crypto enthusiasts and is also trusted by many who are not too knowledgeable about the cryptocurrency universe. It is one of the safest digital assets. 

There are many other important details about Tether, but we will touch on the major ones in the course of our discussion below. 

What Is The Relationship Between Tether And The US Dollar? 

From what we have discussed so far, it is obvious that Tether has a special relationship with the US dollar. The symbol alone, USDT, gives a big hint about the relationship. 

Basically, Tether is the stablecoin tied to the US dollar. This implies that its value is roughly equal to one US dollar at all times. To keep its value stable and prevent the volatility that is prevalent in the market, the team behind Tether keeps a reasonable bank reserve to cushion the effects of market factors. Tether coins are created as USD is invested in the network and its bank reserve. 

Tether was originally created because cryptocurrency exchanges didn't want to deal with USD. There was no practical way to get a fiat currency to work on the crypto universe because of the complications that can be created by regulations and a lot of US laws. This is despite the fact that the USD is an indicator of price across the world. Even cryptocurrencies are always measured against the USD, but most exchanges were and are still not interested in dealing with USD. 

Stablecoins like Tether USDT serve as indicators of price. In the case of Tether, it facilitates transactions involving the 2. It is a standard solution for exchanges that have problems in transferring money into USD

While Tether USDT is not a legal tender per se, it serves the purpose of the US dollar when many crypto entities are performing official transactions with banks and other conservative institutions. With Tether, cryptocurrency users get the best of both worlds (digital and fiat currencies). 

Why Tether Is Considered By Some as a Controversial Cryptocurrency 

Tether is one of the first successful stablecoins and one of the earliest cryptocurrencies. The project was started in 2014 as Realcoin but was eventually distributed in 2015 on the Bitcoin network. In addition to being technically revolutionary, Tether had some reputable backers, including Bitcoin Foundation director, Brock Pierce. 

As one of the first successful stablecoins, Tether faced serious scrutiny and scepticism. It was not surprising that controversies followed soon afterwards. One of the concerns is whether Tether USDT is being used to manipulate the price of Bitcoin

Another of the biggest concerns of some economists and investors is that the Tether team/issuers may not have enough dollar reserves to keep the value of the coin stable in the future. The team has since explained that a vast majority of its holdings is in commercial paper and only about 2.9% were in cash. 

Tether is also considered controversial because of the volume of deposits it holds. With about 60 billion worth of tokens in circulation, the platform is believed to have more deposits than many banks in the United States

Tether has also been hacked in the past, although this happened as far back as November 2017. About $31 million worth of USDT was reportedly stolen during the hack. The company has also been variously accused of lack of transparency, but all accusations have no tangible proof. 

Should You Invest In Tether USDT?

Is tether a good investment? This is the question most people are eager to get an honest answer to. If you are really interested in investing in Tether USDT, this is where you need to pay rapt attention. 

Tether is generally considered a decent investment option for several reasons. It can be used as a dollar replacement and also makes life easier for those who are transitioning from traditional investments to cryptocurrency investments

One of the major reasons people are attracted to Tether is because it is a relatively safe cryptocurrency. It is also considered to be safer than the stock market. Remember that it is tied to the US dollar, so its value is relatively stable. 

Stability, alone, doesn’t define a good investment. In fact, investors need their assets to appreciate in value so that they can make profits. There are many important factors to consider before concluding to invest in Tether and we will briefly discuss them right here: 

How Tether Has Performed In The Past

While the prices of most cryptocurrencies fluctuate continuously, the price of Tether is stable. Therefore, we can't discuss its performance based on price. 

One of the performance indicators of stablecoins is adoption. So, how often is USDT used in cryptocurrency transactions? The answer is “a lot”. At a point, as much as 80% of Bitcoin trading was done in Tether. Recent reports from CryptoCompare indicate that about 55% of all Bitcoin purchases are conducted with Tether.  

We can also consider the trust level of Tether as a performance indicator, though this may not do a lot of justice to the coin. The revelation that Tether and Bitfinex are run by the same team, for instance, created ripples in November 2017, just before the network was hacked. Though the two incidences impacted the reputation of USDT, many informed investors overlooked it. 

In the midst of doubts about its credibility and financial strength, an unofficial audit confirmed that Tether holdings had sufficient funds to support the circulating tokens ($2.25 billion as of June 2018). 

Through thick and thin, Tether’s core investors has remained faithful. The digital currency, on its part, has not disappointed these authentic investors in more than six years of existence. 

Current Market Position of Tether

As we’ve mentioned severally, Tether’s price is approximately the same as USD at all times. It is available in many exchanges and used for several transactions involving other cryptocurrencies. It is regarded as one of the most important cryptocurrencies. 

At the time of writing this post, Tether USDT had a market capitalization of $61,848,734,404, making it the 3rd ranked cryptocurrency in the world in terms of market capitalization. Its fully diluted market capitalization stood at $64,505,953,094. 

The official circulating supply of Tether at the time of making this post is 61.81 billion USDT while the total supply is 64.469 billion USDT. The 24-hour trading volume is $50,931,936,796. Its biggest markets include Binance, Huobi Global, KuCoin, Kraken, and Gate.io. 

Does Tether Have A Future?

The projected future of a coin is probably the most important factor when it comes to investing in it. For Tether, it is safe to say the future is bright. Tether is one of the cryptocurrencies that have served their purposes consistently for several years. It is the most successful stablecoin, and will likely continue to perform well in the near future. 

Considering what it has done so far and the current nature of the global cryptocurrency market, we can boldly say that Tether has a very bright future. It has digitalized the US dollars for cryptocurrency traders and investors. It is easily available in many exchanges and can be easily stored in a digital wallet. Of course, it is a lot easier to use USDT to purchase crypto than the use USD or another fiat currency. 

As long as the cryptocurrency market continues to be relevant, Tether will remain a valuable digital currency. 

Major Reasons to Invest In Tether

Investors flock to most cryptocurrencies with the hope that their prices can increase significantly in the future. So what is so special about Tether, since its price is tied to the USD? 

If you've followed attentively, you might have identified good reasons to invest in Tether. However, we will briefly summarize the most important reasons to choose the coin over other available options out there: 

  • It protects investors from the extreme volatility that characterizes the cryptocurrency market 
  • It is a great way to save crypto fund without risking a drop in its value – it is a mode of storage of value and not a speculative investment 
  • It facilitates international transactions at minimal cost 
  • It makes it easier for anyone to convert real cash to cryptocurrencies 
  • It makes it easier for knowledgeable traders to buy cryptocurrencies at the cheapest rate by quickly taking advantage when the market falls 
  • Tether improves liquidity in the cryptocurrency universe and makes crypto trading a lot easier for everyone 
  • Investing in Tether means you are helping to bring stability to the cryptocurrency universe. 

Why You May Reconsider Investing In Tether

Are you feeling that investing in Tether will be the smartest decision to make in online trading/investing? It is time to think again. Though there are several positive things about Tether USDT, there are a few downsides to investing in the coin that you should know about. 

The major reasons you may reconsider your decision to invest in Tether USDT include: 

  • Tether is tied to the USD, meaning that the price doesn’t outgrow the dollar. The implication is that the coin will not yield profit like a regular cryptocurrency. 
  • Tether is not real money, regardless of how close it is to the USD. 
  • Tether has had several controversies in the past, and there are feelings that it is manipulative. 
  • Tether's authenticity and real value have been challenged by many, including economists. There are good chances that it may face legal battles in the future. 

Where to Buy Tether?

At the moment, Tether is the most widely integrated digital-to-fiat currency. It has become true digital money for the digital age, offering global, fast, and secure payment solutions. 

Different Ways to Buy Tether 

Due to its reputation and the position it has attained in the cryptocurrency universe, Tether is easily available. You can buy from basically all the reputable exchanges as well as from brokerages and many other platforms. 

You can buy Tether from the following platforms:

  • Binance 
  • eToro
  • BitFinex
  • Kraken
  • Coinspot 
  • BlockFi, etc. 

Depending on the platform you choose, you can buy the coin with other cryptocurrencies, bank transfers, and even with your credit card. 

The Best Way to Buy Tether USDT 

Every experienced cryptocurrency trader/investor understands the need to buy any digital asset from the right source. So, where is the best place to buy Tether (USDT)? 

Depending on who you ask, you will get various answers to this question. But the truth is that it is always best to buy a digital asset from a reputable brokerage like eToro. Yes, we recommend Etoro ahead of other platforms for several reasons. 

One of the major reasons we consider Etoro as one of the best places to buy digital assets is its suitability for users of all experience levels. It doesn't matter whether you have been trading and investing in cryptocurrencies and other digital assets for years or just a newbie. You will enjoy several benefits if you choose to buy Tether or other digital assets from Etoro. 

Etoro is the world’s leading social trading platform for many reasons. It is also a full-service brokerage that supports the trading of more than 90 crypto coins and other assets that can be traded online. 

What Next After Buying Tether?

Tether is not the type of coin you should buy and HODL with the hope that its price will go up in the future. You should know this already – it is a stablecoin tied to the USD, meaning the price of 1 Tether (USDT) is always equal to 1 US dollar, give or take. 

It is still possible to make a profit by buying Tether and selling in the future, especially when you consider the fact that it can easily be used to exchange for other coins. So the volatility of other coins can still play to your advantage when you trade with Tether. 

After buying Tether USDT, you can: 

  • Store/hold the token in your digital wallet 
  • You can trade USDT tokens on a reliable platform 
  • You can use USDT to make payments to merchants that accept cryptocurrencies 

Key Points to Keep In Mind 

We’ve covered most of the things you need to know about Tether to determine whether it is a good cryptocurrency for your online portfolio. Here is a recap of the key points to help you make an informed decision: 

  • Tether is a stablecoin tied to the US dollar (it is always worth 1 dollar and brings some sort of stability to the cryptocurrency universe) 
  • Tether USDT is not real money, and it is highly likely that it is not completely solvent 
  • Tether is widely available and is acceptable in all cryptocurrency exchanges 
  • Tether is the 3rd ranked cryptocurrency in terms of market capitalization 
  • Tether has a relatively bright future, as long as the global cryptocurrency market does not crash completely 
  • Tether is easily available and can be bought from different exchanges 
  • Etoro is one of the best platforms to buy Tether from, and probably the friendliest brokerage for trading cryptocurrencies and other digital assets. 

Always Choose To Invest the Smart Way 

Regardless of your experience level, it is best to understand every digital asset very well before investing. It is also critical that you keep learning to become really good at online trading. You can achieve this by reading the right articles and taking the right courses

Do you need more information or professional help in buying, trading, or investing in Tether and other assets? Contact us to learn how to invest the smart way and improve your chances of success. 

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