Crypto Investors Look to Buy Tether as Safe Haven Against Crypto Volatility
Cryptocurrency investors appear to be turning their attentions to the tenth-largest cryptocurrency in the marketplace, which is allegedly pegged to the US Dollar. The Tether price is aligned closely to the value of the US Dollar, with one Tether coin available for one US Dollar. As the value of Tether is linked directly to one of the most influential fiat currencies on the planet, it has led to the coin being labelled the industry’s “stablecoin” and an attractive alternative to the volatility surrounding Bitcoin.
What is Tether?
Many newcomers to the crypto industry have been asking the question “what is Tether?” The premise behind Tether has always been to enhance the fluidity and volume on cryptocurrency exchanges, converting fiat currency such as US Dollars straight into Tether to be used to buy other crypto coins such as Bitcoin and Ethereum. Using this method to buy cryptocurrencies is also faster and cheaper than depositing into exchanges using fiat currency. Tether has been an attractive option for crypto exchanges to circumvent working with banks, and now crypto investors are also acknowledging the benefits.
The company behind Tether, Tether Limited, issues new Tether tokens when high-volume cryptocurrency investors such as hedge funds or crypto exchanges deposit fiat US Dollars in Tether-controlled bank accounts. The new tokens can then be purchased as a proxy for fiat currencies on crypto exchanges that aren’t regulated or licensed to store fiat currency on their customers’ behalf. This month, Tether issued an additional 250 million Tether tokens, raising the currency’s market cap by a value of $250 million.
How can you buy Tether?
Tether is Tether is closely affiliated to the Bitfinex crypto-crypto exchange, which proves particularly popular with traders of various digital assets. Tether is now widely accepted on almost every crypto exchange and can be bought using almost any type of crypto coin or fiat currency – not just the US Dollar. Tether, also abbreviated as USDT, has its own web-based wallet, making it easy to buy Tether and store it, ready to invest in other cryptocurrencies in the future.
Why more Tether in circulation is good news for Bitcoin
Since the additional circulation of 250 million USDT tokens, speculation has begun to mount that the price of Bitcoin could rebound as a result, despite fears the latter’s story may not have a happy ending. The issuing of new Tether tokens suggests fresh capital is due to flow into the cryptocurrency markets, not least the Bitcoin market. In the past, Bitcoin’s price has risen following the issuing of new USDT, jumping from $8,100 to $8,500 within 48 hours of the last influx in May. Of course, those who may have converted fiat currency into 250 million USDT may opt to sit on their tokens and wait for the right time to invest, which could see any price spike become short-lived.
Is it safe to invest in Tether?
Controversy has followed Tether around for many months now, with many people shelving plans to buy Tether as a result. Unfounded reports have suggested Tether Limited doesn’t even hold enough US Dollars to fund all of the USDT in circulation. However, more recently, Tether has managed to provide some clarity on the fiat currency assets it owns, with American lawyers, Freeh Sporkin and Sullivan LLP able to confirm its US Dollar reserves are equal to the amount of USDT tokens in circulation, making it more attractive to invest in Tether. Tether’s CEO, JL van der Velde, reiterated that the company has “consistently stated that Tether is backed by USD reserves at or exceeding the Tethers in circulation at a given movement” and was delighted to finally have an “independent verification” of this in a bid to dispel fake news and theories.
Nevertheless, the report has not been enough to quell some crypto critics, who continue to ponder why Tether will not agree to a comprehensive formal audit of its accounts. In the past, Tether’s legal team has suggested major auditors are not willing to collaborate with cryptocurrency firms due to the risks involved.
However, in simple terms, an increase in the amount of USDT in circulation would suggest there is greater appetite for purchasing leading cryptocurrencies. Charlie Lee, the founder of Litecoin, which is considered to be the digital silver to Bitcoin’s digital gold, agrees that this is a positive sign that the markets could become more bullish in the months ahead. Although Lee was quick to add that those with fresh USDT tokens may not be set to buy Bitcoin right away, preferring to sit on their hands until a great investment opportunity arises.