Tether as a Stable Coin
What you’ll notice is that the price oscillates around the 1.000 mark.
Main Purpose of Tether
It’s what’s known as a stable coin. So its main goal is to track the US dollar’s price 1:1. Tether is not a long-term investment that will grow your money by itself because it stays pegged to the U.S. dollar.
Use of Tether by Investors
Investors use this crypto coin to hedge against the US dollar. They use Tether to gain exposure to the US dollar but in crypto form. Tether also sometimes acts as a “bridge” between the fiat and crypto world – as in people often buy stable coins to then buy other cryptos.
Investment Strategy with Tether
It’s for the investors who want to invest and diversify their money in a non-government measure and to control their own finances instead of putting the money in banks.
Concerns and Risks
The problem is that Tether (USDT) always denies an audit. They have also been investigated by the NY Attorney General’s office for lying about their reserves. Also, there is major volatility and uncertainty with crypto exchanges since the FTX and Alameda debacle. Binance (One of the largest Crypto currency exchange) even paused customer deposits of stable coins USD Coin and Tether on Thursday morning without explanation. This is not safe as a hedge in my opinion. Hence, it’s another reason to stay away from even stable coins like Tether...
