Everything about Tether you need to know

Everything about Tether you need to know

Written by Sophie Robertson, In Crypto, Updated On
May 22nd, 2024
, 420 Views

The crypto world is expanding, and we are witnessing a massive rise in its popularity. While new cryptos are being added, you need to know Tether. It is abbreviated as  (USDT). It is a stablecoin that has been etched to the US Dollar. The ownership of Tether is in the hands of a company named iFinex. This company is primarily based in Hong Kong.  On its initial day, Tether was launched by the name of Real Coin back in July 2014.

Only a few months later, in November, the company changed its name to Tether. Tether began its journey in 2015. Tether was initially based on the Bitcoin blockchain. Tether now supports Bitcoin’s liquid and Omni protocols. The reports of May 2022 regard Tether as the third largest Cryptocurrency. It only comes behind Bitcoin and Ethereum.  Tether is also credited to be the largest stablecoin. This credit is because of its market capitalization, up to 83 billion US dollars.

ALL ABOUT TETHER –

Tether hails from the family that produces the fastest-growing breeds of cryptocurrency, known as stablecoins. The main aim of stablecoins is to keep the pricing of their tokens stable. They do so by etching a token’s price with any traditional currency (preferably the US dollar).  The stablecoins are etched to any leading conventional currencies and often receive backup from collateral reserves that are either entirely or predominantly made up of these etched currencies.  This thoroughly ensures that the new generation Stablecoins are less volatile than conventional Bitcoins.  The price volatility that the investors have witnessed regarding the traditional cryptocurrencies owing to the financial market’s ups and downs does not work here.

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The more stable the value of currencies remains, the more traders promote their use of exchange like conventional money. Stablecoins have made it relatively easier to penetrate the crypto market and pass through it. This rapid growth of popularity has led to platforms like decentralized finance (DeFi) using stablecoins as collateral, which is used in lending and staking protocols.

The mid-May 2022 did not go well for rope as it was observed that there was a fall in its price. It fell to as little as 0.96 US dollars. This was the effect of the falling price value of one more stablecoin in the digital finance sector, TerraUSD, abbreviated as (UST).  This was done by an issuer who was neither affiliated with Tether nor BitFinex.  But the prices of the tokens had a quick rebound. This time, the prices rebounded to more than  0.99 US dollars. Following this, Tether said it would continue to honour the requests about redemption, which had reached two billion tokens on the 12th of May. This was taking place at a one-to-one ratio with the US dollar.

USEFULNESS OF TETHER

Tether is instrumental in moving funds from the new digital crypto markets to the traditional financial market system. It bridges the gap between conventional financial assets and modern digital financial assets.  The primary reason for this is also the most crucial reason why Tether is revered highly in the tech investment system.  This reduces the chances of volatility in the market by a good deal. The one-for-one policy etched to the US dollar has proven very handy.

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CONCLUSION

It is evident that Tether (USDT), though a newbie in the digital financing sector, has covered substantial markets in the sphere. Most importantly, Tether has bridged the gap between conventional and digital markets. As a result, this has lessened the chances of market volatility and has become a primary choice for traders worldwide.

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