The current price of Tether fluctuates around $1.01; the total market capitalization is $4,133,119,553, which makes USDT the 4th most popular digital currency as of December 2019. The circulating supply is 4,108,044,456 USDT. The daily trading volume is around $26,474,785,221.
The all-time high of Tether, $1.21, was reached on May 27, 2017. On the other hand, the all-time low of Tether, $0, occurred not long ago on September 18, 2019. Currently, the estimated ROI (return on investment) of USDT is 0.61%, which means that $100 worth of USDT bought at the time of the Tether launch would yield around 60 cents of profit today. In reality, despite market fluctuations, the price of Tether always strives to get to the value of $1, so talking about ROI in this situation is not quite appropriate.
On the one hand, talking about Tether price fluctuations may not make any sense: how can a stable coin experience such shifts, if it is by definition tied to the price of USD? However, due to the way cryptocurrencies work, it is hard to ensure the stability of a given asset in the dynamic environment of the crypto-market, be it an established stable coin or a newly emerged token. Tether employs several mechanisms that aim to recover USDT price in case of substantial fluctuations, and most of the time, it is successful, and the price recovers soon. Nevertheless, Tether’s history has seen several curious cases.
One of the most notable price drops in the history of Tether occurred on April 25, 2017, when USDT price reached a $0.91 mark. The shift was probably caused by the news of Taiwanese banks having rejected Tether international wires. A market panic followed, forcing traders to sell their USDT, thus substantially lowering the price. Curiously, at the same time, the exchanges that were used to sell USDT had experienced a significant increase in Bitcoin price, as well as other cryptocurrencies that were traded in pairs with USDT. This has led to speculations about Tether’s alleged role in manipulations of Bitcoin price. However, the company stated that Tether has never engaged in any kind of market or price manipulations, and USDT cannot be used to manipulate the rate of any other coin on a given exchange.
Some significant events, such as market attacks or falls, may lead to a shift in USDT coin price. However, throughout its history, Tether coin has shown fast recovery from any changes, so those situations can only affect traders that employ a specific trading strategy. Thus, when compared to the price fluctuations of traditional cryptocurrencies, USDT is indeed a stable coin and a reliable asset for value storage.
What is Tether?
Tether (USDT) is an interesting member of the cryptocurrency world. It was designed as a so-called stable coin, meaning its price is artificially sustained at the level of another, real-life currency. As the name suggests, in the case of USDT, it is the American dollar.
Created by Jan Ludovicus van der Velde in 2015, Tether claims to be backed by USD in a 1:1 ratio. Based on the Bitcoin technology, the project aims to combine the benefits of both crypto and fiat money in one asset. The technology behind Tether is based on the Proof of Reserves (PoR) inventory process.
One of the main advantages of this concept is the speed and ease with which this form of USD can be accessed and transferred around the world, 24/7. A superior level of security is provided by dedicated encryption methods, together with the decentralization inherent to all cryptocurrencies. There are no fees for transactions between different wallets and a minimum fee for conversion to/from fiat money.
The representatives of Tether claim that they aim to have all US dollars in reserve so that they could meet the withdrawal demand at any time. However, they have not been able to meet the withdrawal demand in 2017. In general, the full-backing principle of Tether. Which relies on a promised audit of USDT reserves, has never been fully substantiated.
In November 2017, almost $31 million worth of USDT was stolen from the network. Later analysis revealed a close resemblance of the attack to a hack of Bitstamp in January 2015.
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