Tether cryptocurrency: USDT market analysis | Bullbear Analytics

Currency name(s):  Tether
Genesis Block:  September 2017
Total Supply:  the current circulating supply is around 3.7 billion Tether tokens; the maximum supply is limited to 4 billion tokens, but that can be changed in the near future, depending on how much the Tether network holds fiat currencies
Algorithm: Omni protocol
Features:  counterfeit-proof, transparent
Website: https://tether.to/

What is Tether?

The Tether network represents a digital currency, except that it does not stand on its own, but derives its valuation from being directly connected to fiat currencies. Part of the cryptocurrency community argues that Tether represents an attempt to digitalize fiat currencies and implement them into blockchain systems, which is not an untrue statement. All Tether currencies, be it Tether US dollar, or Tether Euro (tickers are USDT and EURT respectively) are backed by the reserves the Tether network holds in the respective fiat currencies, and they typically trade at or close to a 1:1 ratio with its fiat pair. The goal of implementing this kind of approach to blockchain technology is to make transactions involving digital currencies easier, as well as to bring all benefits of blockchain to standard, traditional currencies such as such as keeping records in order to avoid counterfeit, ease of transactions from one entity to the other, and the ability to make payments across borders quickly and effectively.

The whole Tether network gives a user the ability to convert fiat currency into digital currency with a 1:1 ratio. This way, businesses that are willing to accept cryptocurrencies can do so and can easily develop and establish prices, without the need to convert and constantly update their prices according to Bitcoin’s valuation for example. Using Tether is a simple and easy way to offer services without the hassles that plague transactions done in fiat currencies.

Technology

The Tether network itself doesn’t have a blockchain of its own but is actually using the Bitcoin blockchain, the most secure and stable blockchain on earth. The whole Tether network is created by incorporating metadata into the Bitcoin blockchain through the Omni platform and the Omni protocol. Fund transfers are also done by the Bitcoin blockchain as the Omni platform allows that kind of integration with the blockchain.

The Tether network operates the way banks do – in order for a client to receive the funds, they must be within the bank’s system first, that is why the Tether network claims that every USDT token is backed by real, fiat currency, but in order to transfer funds from one entity to another a process of creating and destroying Tether tokens occurs which has raised suspicions from skeptics in the cryptocurrency space.

One user wishes to transfer a certain amount of money to another user. They go to the Tether network and start the process. They set the amount of money they would like to transfer, and begin the transaction. The network then converts the amount into Tether tokens (at the previously mentioned 1:1 rate) and sends it to the other user. The user then receives the funds, and if they wish to withdraw it, they can, and they will receive a very close to 1:1 ratio in US dollars, minus the minor transaction fees. Once the withdrawal has been completed, the Tether tokens used to complete the transaction and to store the fiat currency are destroyed so that they cannot be used twice or multiplied.

Tether Markets 

Sometimes referred to as Money 2.0, the Tether network has set out to achieve the digitalization of traditional fiat currencies. Unlike Bitcoin, which was created to abolish current fiat currencies, Tether was created in order to improve them and to bring the blockchain technology to them. Of course, mass adoption would need to occur before this network reaches its critical point and users can easily rely on it to make online payments, make purchases or send money without the need for it to be converted several times as it is done today, but the potential is there nonetheless. With that in mind, the tether markets are still relatively young and unpredictable despite the attempted peg so holding for long periods of time is not advisable at this time. 

Tether Trading

It comes as no surprise that this token has been much more stable than all free-floating cryptocurrencies throughout its existence, with very small variations in price, although this makes it suboptimal for active trading which is why we have never issued any technical coverage on it. It is also why this token (and others like it) is referred to as a stablecoin, and is one of the main reasons why it has been fairly heavily adopted since its inception as it is currently within the top 10 most valuable cryptocurrencies in the world. However, it did have slight variations in price during May 2017, when the highest price per token was recorded, and it was $1.21. There was also a time when the Tether token was lower in price than the fiat US dollar, and that happened in February 2017 when the price per token was $0.85. Of course, these price variations tend to be brief and unpredictable so we don't recommend trying to time them for profit.

Although it is backed by fiat currency, Tether is still a cryptocurrency by its nature and therefore it can be found on various markets such as Binance, Bit-Z, or CoinEgg for example. All of these markets offer cryptocurrency trading pairs and Tether can be bought and sold for Bitcoin, LitecoinEthereumTron, or various other cryptocurrencies. Bitfinex and Kraken also allow fiat currency trading pairs, and Tether can be bought as well as sold here for US dollars.

The crypto space is growing large, and it is difficult to keep information about all the various networks/assets straight. We do our best, but information on this page has not been verified for accuracy, and is provided as-is, for your own consumption. If you find an error that needs correcting, please email us at support@bullbearanalytics.com.

Disclaimer: Please always do your own due diligence, and consult your financial advisor. Author owns and trades bitcoins and other financial markets mentioned in this communication. We never provide actual trading recommendations. Trading remains at your own risk. Never invest unless you can afford to lose your entire investment. Please read our full terms of service and disclaimer at the BullBear Analytics Legal.