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What is Tether (USDT)?
Tether or USDT in ticker symbol is a blockchain-based cryptocurrency. In circulation, the crypto coins are backed by an equivalent quantity of traditional fiat currencies, such as the US dollar, Euro, or Japanese yen, held in a designated bank account. The USDT sign is used for trading Tether tokens, the native tokens of the Tether network.
Tether is a stable coin, a type of cryptocurrency that aims to keep cryptocurrency valuations stable, instead of the huge swings seen in the prices of other famous cryptocurrencies such as Bitcoin and Ethereum. Instead of being utilized as a medium of speculative investments, this would be used as a means of trade and a mode of wealth storage.
Tether falls under the category of fiat-collateralized stable coins. This means that each crypto coin in circulation is backed by a fiat currency such as the US dollar, Euro, or yen.
Other stablecoin types include crypto-collateralized stablecoins, which use cryptocurrency reserves as collateral, and non-collateralized stablecoins. Non-collateralized stablecoins lack collateral but operate similarly to a reserve bank to maintain a sufficient supply of tokens, depending on the economic situation.
Tether was designed to bridge the gap between fiat currencies and cryptocurrencies, providing users stability, transparency, and low transaction fees. It is pegged to the US dollar and has a one-to-one value ratio with it.
Why do traders use it in trading?
Tether is beneficial to cryptocurrency investors because it allows them to avoid the severe volatility of other cryptocurrencies. Furthermore, using USDT rather than the US dollar or any fiat currencies eliminates transaction costs and delays that impede trade execution in the cryptocurrency market.
It also allows investors to avoid the extreme volatility of other cryptocurrencies. A trader may reduce their exposure to a sudden drop in the price of cryptocurrencies by transferring value to USDT. Transferring BTC into Tether rather than the US dollar is also much faster and less expensive.
Tether tokens are available for purchase and are exchange to other cryptocurrencies on popular cryptocurrency exchanges such as Binance, Gate.io, Kucoin, Bbex, CoinSpot, BitFinex, Kraken, and many more.
Is tether a Stablecoin?
Tether is the world’s first and most well-known stable coin. True USD (TUSD), Pazos Standard (PAX), Binance USD(BUSD), and USD Coin( USDC) are some of the other stablecoins available (USD).