Tether USDT

Tether (USDT) is the most popular stablecoin in terms of volume, and as the name suggests, it’s tethered to the US dollar to minimise price fluctuations. Unlike cryptocurrencies whose prices fluctuate, stablecoins like Tether (USDT) aim to maintain the value of other assets, meaning the value of 1 USDT should be around 1 US dollar.

Developed as a utility token representing fiat currencies, it uses blockchain technology to facilitate global payments.

Tether aims to maintain its price constantly at one US dollar, so the price trend since release has usually shown only slight fluctuations around the value of one US dollar. Its all-time high was reached in July 2018 with a price of 1.32 US dollars per USDT. In March 2015, the coin fell to its all-time low of 0.57 US dollars per USDT.

Major price milestones include:

• 2015: Release

• March 2015: 0.57 USD / USDT (all-time low)

• July 2018: 1.32 USD / USDT (all-time high)

• February 2023: 1 USD / USDT

As with all cryptocurrencies, the supply and demand ratio determines the Tether price. Although it is classified as a stablecoin, technically, Tether is a token. Tether is pegged to the US dollar (USD), which gives the crypto coin its name, USDT. 

Tether Labs, the company behind Tether, reserves back the coin. If demand increases, the company issues more, if demand decreases and coins are exchanged back for US dollars, Tether Labs destroys USDT coins to maintain stability. 

However, there have been past suspicions that these reserves either do not exist or are not sufficiently liquid. Regulatory authorities have already investigated this matter. The danger is that if there is a large sell-off by investors, there may not be enough funds to ensure a stable rate.

Investors can store profits from crypto trading within the cryptosystem without converting them into fiat currencies. Fiat currencies are established currencies like the US dollar or euro, regulated by states and financial institutions.

Since its release in 2015, USDT coins have served as a stable exchange currency. However, suspicions suggest that Tether manipulated the crypto hype in 2017, with market participants allegedly using USDT and the Bitfinex platform to artificially drive up the Bitcoin price. The increasing interest from media and investors led to a bull run with rising prices in the following months.

Tether Labs actively controls the price of Tether (USDT) by issuing new USDT, resulting in minimal volatility. This stability allows Tether to maintain a consistent price and average rate even during fluctuating bull and bear markets in the crypto industry. Due to its stable price, Tether ranks among the top three cryptocurrencies by market capitalisation.