Trading United States Dollar Tether (USDT) on Beaxy
What stablecoins and USDT are
United States Dollar Tether, or USDT, is the first stablecoin, and still one of the most popular. It was jointly founded in 2014 by Bitcoin investor Brock Pierce, entrepreneur Reeve Collins, and programmer Craig Sellars. USDT is issued by Tether Limited. Stablecoins are cryptocurrency backed by fiat currency. In the case of USDT, the cryptocurrency is backed by the U.S. dollar at a 1:1 ratio, which means one USDT is equal to $1. Its overall capitalization exceeds $80 billion.
Here’s how USDT stablecoin is issued: Tether Limited receives funds from individuals or legal entities, then issuing a similar amount of USDT; it destroys the matching number of coins upon withdrawal.
Tether stablecoin was originally created in the Omni Layer network, using the Bitcoin protocol. However, in 2018 it was added to the Ethereum blockchain as an ERC20 standard token. Today, USDT is available in more than 20 popular blockchain networks, including TRON, EOS, Algorand, Solana, and OMG Network.
USDT was fairly volatile at first, but it’s become less so since early 2019. This fact most likely owes to the overall cryptocurrency market development and the constant growth of trading volumes.
Tether also has other stablecoins besides USDT:
- EURT: a Tether coin backed by the euro.
- CNHT: a Tether coin backed by the Chinese yuan.
- XAUT: a Tether coin backed by real gold.
Benefits of Tether (USDT)
Relative stability compared to classic cryptocurrencies is what makes stablecoins attractive. In a way, Tether bridges the gap between digital and fiat currencies. Investors can trade it without suffering from high volatility issues inherent to other cryptocurrencies. This way, investors can own a digital asset similar to fiat currencies, while continuing to trade other cryptocurrencies; USDT is popular enough to be featured in countless pairs on the exchange.
Storing Tether (USDT)
Just like other cryptocurrencies, USDT can be stored directly in cryptocurrency exchange accounts. There is also a number of wallet options for storing assets, such as web or mobile wallets you can use on your phone as regular apps. Another option is hardware wallets for cold storage, meaning the device holding your digital assets doesn’t even need to have Internet access. Storing assets on an exchange or in a mobile wallet are the most popular options.
USDT price
As we already mentioned, what sets stablecoins apart from other cryptocurrency is the fact that their price matches that of the fiat currency backing it.
That is, 1 USDT = $1.
However, that’s not the full truth. In reality, USDT value tends to match the price of the U.S. dollar. The price difference rarely exceeds a few tenths of a percent; however, periods when USDT was worth considerably less or more than a dollar are not unheard of. This can owe to big fluctuations in the cryptocurrency market; when other digital assets are swinging, Stablecoin value may also change. For example, 2015 saw Tether at its lowest, $0.57, while in 2017, the record high of $1.21 was registered. Even though such value swings can be called significant for Tether, it remains fairly stable in comparison to wildly volatile classic cryptocurrencies.
This feature of Tether makes it a useful tool for cryptocurrency investors. Thanks to this stability, you can use USDT every time you need to lock in your profits from trading digital currencies. It is also convenient for transfers. With USDT, the transfer amount is not going to fluctuate due to the high asset volatility; it can be easily predictable, as the stablecoin’s amount is unlikely to change significantly.
USDT historical price
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Like other digital assets backed by fiat currencies, USDT is useful for trading. It helps traders lock in their capital that could otherwise suffer from high volatility inherent in other cryptocurrencies. Also, the use of stablecoins can reduce commission cost and help avoid delays in crypto/fiat conversion.
The stablecoin’s stability, i.e. low volatility, makes traditional trading with it not the most profitable idea. Of course, you could purchase USDT and expect a sharp rise or fall in its value, but you’re hardly going to make much this way. A much more profitable endeavor would be trading cryptocurrency pairs featuring Tether. Many popular pairs include it, so you can buy other digital currencies for USDT when they’re in doldrums. Once they start rising, you can decide to go back to the stablecoin, thereby locking in your profits. This way, you won’t have to worry about high market volatility making you lose profits. Learn more about USDT trading on Beaxy.
BuyThere are many ways to buy Tether stablecoin. Here are three possible options for buying USDT.
Hands down the most common one is buying cryptocurrency on the exchange. Tether stablecoin is popular enough to be featured on many major platforms, including Beaxy. You can buy USDT on Beaxy for different currencies: usdt - usdc .
Another option is to apply to Tether Limited directly so they can generate new tokens for you. This method is only available to users with confirmed accounts; however, the company is picky about approving accounts, and it also charges $150 for identity verification. On top of that, the least amount you can exchange this way is $100,000, which makes this method feasible only for big investors with deep pockets.
There is also an alternative to the exchange in third-party websites that will accept your fiat currency for USDT. This method, however, is considered the least secure, and the commission charged by such exchangers is often exorbitant.
USDT exchange
Being one of the most popular stablecoins, USDT is featured in many cryptocurrency exchange pairs: usdt - usdc . If you decide to opt for a cryptocurrency exchange as the best option for individual investors, you’ll have to undergo a short signup process, providing some documents to confirm your identity. This is a standard procedure for proven crypto exchanges; at Beaxy, it barely takes any time. Signing up and identity verification increase security. Do your best to avoid exchangers that do not ask for your details at signup. Once you’ve signed up, you can deposit fiat currency, and then trade it for Tether stablecoin.
USDT is a great way to profit from trading while paying minimal commissions. It’s also perfect for locking in your capital and diversifying risks. Join Beaxy and be on your way into the big world of trading and investment!