The crypto market offers a wide range of digital assets, divided into coins, NFTs, tokens, stablecoins, etc. The difference between coins and tokens is what these assets are based on. Coins (BTC, ETH, etc.) are based on their own blockchains and tokens (Chainlink, Shiba Inu, etc.) are based on other blockchains (Ethereum blockchain, for example).
Today we would like to talk about one of the most popular types of crypto: stablecoins. The most used stablecoins:
- Tether USDT
- Binance USD (BUSD)
- USD Coin (USDC).
What is Tether?
Tether is the first and most popular stablecoin on the cryptocurrency market. The essence of a stablecoin is its stable value, which is usually equal to 1 USD or 1 EUR. That means the USDT to EUR rate is always around one euro. At the moment (mid-October 2022), it is 1.0045. The developers of Tether claim that the value of USDT is 80% backed by USD reserves. So, USDT is not an asset for trading or investing because its price is not volatile, and it does not matter where the crypto market drops or boosts, one USDT will always be equal to one dollar or around that.
What’s the Point of Buying USDT if It Can’t Be Traded?
You ask why stablecoins are used in the cryptocurrency market. The answer is to hedge risk and achieve at least some stability in this volatile market. When price trends change, cryptocurrency prices move incredibly, so investors often convert cryptocurrencies into stablecoins to avoid losing their savings. In this way, they do not leave the cryptocurrency space and lose money due to a sharp price drop.
You can buy Tether crypto on the WhiteBIT crypto platform. It allows operations with crypto-fiat pairs, so you can easily convert USDT to dollars and move funds directly to your bank card. That’s a convenient option for traders.
Wrapping up, we must say there is no sense in making a Tether price prediction, for its price is always around one dollar or euro. So this asset serves sorely for risk hending and money transfers in dollars equivalent.