Everything about Tether you need to know

Written by Sophie Robertson, In Crypto, Published On

January 6, 2023

, 377 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 with 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 originally based on the Bitcoin blockchain. Tether now also supports Bitcoin’s protocols of liquid and Omni as well. 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, which adds up to 83 billion US dollars. Visit http://bitcoin-era.pl to be extra safe and sure when it comes to trading bitcoin.

ALL ABOUT TETHER –

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

The more stable the value of currencies remains, the more the traders promote it to be used as a medium of exchange like the existing conventional money. It is being observed that stablecoins have made it quite easier to peep into the crypto market and passes through it. This rapid growth of popularity has led to the use of such stablecoins as collateral by platforms like decentralized finance (DeFi) which is used in lending as well as staking of the protocols.

The mid of May 2022 did not go well for tether 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 named TerraUSD, which is abbreviated as (UST). This was done by an issuer who was neither affiliated with Tether nor affiliated with 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 that it would continue to honor the requests pertaining to 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 very instrumental in moving funds from the new digital Crypto markets to the traditional financial market system. It basically bridges the gap between conventional financial assets and modern digital financial assets. The basic reason for this is also the most important 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 policy of one-for-one etched to the US dollar has proven to be very handy in this case.