Tether is currently the most well-known stablecoin on the cryptocurrency market. With a total average daily volume of approximately $ 75 billion, it is the most traded coin. But why is that and what exactly is it, a stablecoin?
Tether is a coin that is related in value to the US dollar. The principle therefore applies that 1 USD equals 1 USDT. The name stablecoin has therefore not been stolen because that stability is exactly what it is all about. It is a way for crypto investors to protect their funds against excessive fluctuations of, for example, Bitcoin.
So it is in fact a digital version of the USD that has the advantages of a crypto currency on top of stability. Its origin is transparent and traceable and it can be shipped all over the world relatively free of charge within seconds. The Tether is therefore an ideal alternative for crypto investors who do not want or cannot have access to the real US dollar. And that also applies to trade fairs.
To be able to offer trading pairs with the “greenback” USD as a crypto exchange, certain rules and legislation must be complied with. These mean that the users of those exchanges also have to comply. These are usually the KYC and AML obligations (Know Your Customer and Anti Money Laundering) where you have to link your account to your personal details on your passport and / or home address.
Exchanges that are not willing or unable to comply with this, therefore quickly choose the Tether stablecoin. Therefore, USDT pairs are much more common on the exchanges than USD pairs. It is also the ideal way for many crypto traders to keep your value between trades and have the certainty that they will be worth the same some time later.
Market volume
The dominance of the Tether stablecoin has risen to over 70% of the total market volume traded in the past 3 years. While Bitcoin pairs still accounted for roughly 50% of the total market volume in the first quarter of 2017, it has now fallen to less than 15%.
This is a major problem for some crypto critics because Tether has basically become the reserve currency of the entire crypto industry. The fact that behind the Tether stablecoin is a private company with its own interests is all the more reason for those critics to be concerned and seriously question the workings of the crypto markets.
We will not elaborate on the entire Tether history here. If you would like to know more about this, we can recommend that you take a closer look at our website. Let us say that Tether was a welcome thing for many traders in a stock market climate where heavy price fluctuations are very common. It goes without saying that the number of Tether in circulation has grown with the entire crypto world. Especially when you consider that all exchanges use the USDT pairs.
Other stablecoins
If you are not completely at ease about the matter, there are already several alternative stablecoins that you can use with the same goal in mind. There are the TrueUSD (TUSD), USD Coin (USDC), DAI or the BINANCE USD (BUSD). So if you want to park your value in the short term, one of these stablecoins can be an interesting alternative.
