The cryptocurrency market would be much more challenging to enter if it wasn’t for the advent of stablecoins like USDT. These cryptocurrencies pegged to the US dollar allow traders to be much more flexible when entering or exiting positions. 

With fiat money, there’s still some significant friction to enter crypto markets. This is why many investors choose to easily buy ETH to USDT and skip the tedious KYC procedures of crypto exchanges. 

This article will provide you with a deep dive into USDT (Tether) fundamentals, advantages, and use cases. 

Tether Concept

The concept behind Tether is fairly simple. This cryptocurrency is pegged to the value of the US dollar, with each USDT always being equal to one USD. To achieve this, the Tether company holds fiat assets or equivalent assets in reserve and allows users to redeem USDT for USD. 

Consequently, this makes USDT an ideal onramp into the cryptocurrency market, as it allows users to easily purchase other coins on exchanges like godex.io. 

Coming into the market in 2014, it’s now the oldest stablecoin in existence. It’s also the most adopted stablecoin, with a market cap of $80 billion. As such, it stands tall at the #3 spot by market cap size. 

USDT: Goals And Use Cases

Stablecoins like USDT have multiple use cases and benefits. Given their peg to the USD, they are a great shield from volatility. At the same time, they are able to conserve the advantages of blockchain technology, such as self-custody, security, low transaction fees, and speedy transfers.  

Trading

One major use case for Tether remains the facilitated onboarding into the crypto markets. Users can purchase USDT and access thousands of different trading pairs on centralized exchanges. 

Moreover, it allows traders to quickly exit volatile assets like Bitcoin or Ethereum and wait on the sidelines for a more opportune market entry. It allows traders to quickly execute their position without having to go back to fiat, which is both costly and slow. Some utilize calculators to convert USD to BTC or other cryptocurrency amounts as part of transactions or research – however crypto investing carries risks to consider.

Remittances

Users often use cryptocurrencies for cross-border transfers and payments. However, due to their high volatility, some prefer using USDT to ensure that they transfer the exact value. 

Compared to fiat, USDT provides multiple advantages for remittances. Even though USDT conserves the value of the dollar, it provides quick, secure, and cost-effective transfers. An international dollar money transfer would require multiple intermediaries, which would incur costs and delays. USDT is sent from one wallet to another, only costing a fraction, and the transaction is nearly instantaneous. 

Decentralized Finance

DeFi is a growing niche in the blockchain industry, providing users with financial instruments previously inaccessible to them. Tether is a major factor in this space, as it allows users to access decentralized exchange trading pairs and lending platforms. 

For instance, one could supply USDT to a lending protocol and receive high yields for their service. Another use case example is providing liquidity to decentralized exchanges and accumulating rewards from trading fees. 

Diversification

Tether allows users to diversify their holdings during market cycles. For example, in times of high volatility, investors with low-risk tolerance can opt to transfer their assets into USDT. This allows them to avoid market fluctuations and conserve value in their portfolio. 

What’s more, it provides users with a riskless asset option while remaining in the ecosystem. 

Tether Market Performance

Tether came into the markets in 2014 and helped revolutionize the space. By providing the benefits depicted in this article, it quickly became a major player in crypto. 

Over the years, the crypto community has expressed some concerns regarding the company’s USD reserves and USDT solvency. However, this hasn’t hindered Tether’s growth. While other stablecoins have attempted to take a portion of the market, USDT still remains on top. It currently stands at 65% dominance over other stablecoins, including major ones like USDC, BUSD, and DAI. 

Investing In USDT Is Always A Good Idea

Having a portion of your portfolio is a great hedge against the volatility in the unpredictable crypto markets. Holding USDT will allow you to remain active in the markets and benefit from quick entry and exit positions. 

Additionally, the USDT stablecoin is present on multiple blockchains, which makes it easy for users to jump into diverse DeFi ecosystems.