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What is Tether (USDT)?

Tether (USDT) is the first Stablecoin cryptocurrency — a Stablecoin refers to a digital asset pegged to a fiat currency or real-life asset. Tether began under the name ‘Realcoin’ in 2014 and was founded by Brock Pierce — Bitcoin’s Foundation Director — Craig Sellars, and Reeve Collins.

Tether is pegged to the US dollar (USD), meaning the coin’s value does not fluctuate based on supply and demand like other cryptocurrencies, such as Bitcoin or Ripple. The value of USDT is maintained with a 1:1 ratio of the USD, which Tether controls in the Tether Reserves.

Many traders opt to purchase Tether because it is a ‘stable’ cryptocurrency and is less volatile. Tether (USDT) is the most significant integrated digital-to-fiat currency in the world and is one of the oldest stablecoins. It is also one of the few currencies that permit the USD to be traded on the blockchain. Due to its stability, Tether is also used by many financial services, providing a speedier transaction process for exchanging and depositing fiat currencies.

Tether (USDT) is one of the many cryptocurrencies available with BTC Markets. We are Australia’s largest and most liquid crypto exchange platform, allowing investors to be exposed to 26 different markets. Our mobile app also allows investors to trade on the go and have instant access to current market fluctuations.

Whether you’re looking to learn how to buy USDT or want to compare other cryptocurrencies available for purchase, you’ll find it here at BTC Markets. Learn more about the features traders love, or start trading now by signing up for an account today!

What makes Tether unique?

While near-zero fees and instant transactions are a big perk for many traders, there are a few other factors that make Tether a worthwhile investment, including:

  • Less volatility — One big concern among traders looking to invest in cryptocurrency is uncertainty. The market is receptive to massive peaks and falls, which can improve or jeopardise a trader’s portfolio value. As a stablecoin, Tether does not have the same volatility as other cryptocurrencies as its value isn’t determined by supply and demand.
  • Integrated with USD — Aside from its reduced volatility, traders who buy USDT also benefit from its fusing with the US dollar, which can also be used to trade on the blockchain for extra assurances. Very few digital assets allow this kind of integration.
  • Not decentralised — Tether is linked to a real-life currency and is regarded as a stablecoin, so the crypto is not centralised. Depending on your risk profile or current portfolio, this could impact your trading strategy.

How does Tether maintain a 1:1 ratio with the US Dollar?

Tether’s value is not determined by its demand. Instead, its value is maintained through a 1:1 ratio with the USD — $1 = 1 USDT token. Tether controls the value of USDT in the Tether Reserves. Tether can maintain this ratio so long as the tokens are redeemed at $1 each and traders continue to trade their tokens regularly and provide steady and reliable liquidity.

But that’s not to say that USDT hasn’t gone above or below its $1 goal in the past, proving that no matter how ‘fixed’ a currency may be, the market will continue to remain somewhat unpredictable.

How do you buy Litecoin in Tether?

One benefit of investing with crypto is a trader’s ability to switch and trade between currencies. If you want to buy Litecoin using your Tether tokens, you’ll need to set up an exchange in your investment platform.

You’ll also need to consider how much of your tokens you intend to part with — depending on your investment strategy, you might want to exchange only a fraction of your token, so you can continue to receive a potential profit if the coin’s value ever increases.

Frequently asked questions

What do I do after I buy Tether?

Once you’ve been trading regularly and learned how to buy Tether, you’ll need to determine a way to store your new digital assets safely. Digital wallets are an increasingly popular choice among investors as they provide a seamless transition and are highly convenient. The two main types of digital wallets include:

  • Hot wallets — These are digital wallets that are kept on a browser or within an app. This is the more convenient option, as it keeps all your data and assets in one place — but it’s also the riskiest. Hot wallets can make traders more vulnerable to cybercrime. If you intend to store your Tether this way, be sure to read our security tips for keeping your assets safe.
  • Cold wallets — Cold wallets provide more flexibility, as data can be stored and taken offline. Traders opt to do this with a USB stick. This can also reduce your risk of being hacked or having your digital assets stolen. But it’s essential to remember that these are tangible. If you lose your cold wallet, you will also lose your purchased currencies.

As both options have their benefits, many traders choose to combine hot and cold wallets. However, your chosen solution should come down to your personal investment strategy.

Can I buy Tether with a credit or debit card?

If you are planning to buy USDT in Australia through BTC Markets, keep in mind we only support BTC and AUD payments via BPay and Osko.

How do I sell Tether?

To keep your portfolio profitable, it’s crucial for investors to sell and buy Tether tokens regularly. If you wish to sell your Tether tokens, you can do so in the BTC Markets app. Simply log into your account, scroll down to the red-lettered ‘Sell’ form and enter the volume and price you want to sell your Tether for.

We recommend selling your Tether through a Market Order for a faster and easier transaction process.

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This Week in Crypto: 20th October 2022
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This Week in Crypto: 20th October 2022

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