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5 Things to Know Before You Buy USDT

Stable coins are one of the most lucrative options for savvy crypto investors. These tend to provide relief from the fluctuations, which are normal with other cryptocurrencies.

So, If your radar is focused on Tether (USDT) currently, then there are some things that you must be aware of before diving in.

Curious to find out what these are? Read on to quench your curious thirst!

USDT – The Basics

Tether is one of the most predominant stablecoin in the financial sphere. With a market cap of 3 Billion U.S. Dollars in November 2021 and 83.15 Billion U.S. Dollars in May 2022, it is sufficient to say that this stablecoin is here to stay and conquer!

Tether ranks as one of the biggest cryptocurrencies in the world, with its pricing being connected to the U.S. Dollar. This particular segment has made up about half of the overall value locked in Decentralized Finance or DeFi. Investing in Tether is unlike what you may encounter with other cryptos since its stability is unmatched.

#1 – Tether is Connected to U.S. Dollar

The first thing you should know about Tether Is that it’s a stablecoin that is connected to U.S. Dollars. A stablecoin is connected to another real-world asset. 1 Tether is connected to $1. Since Tether’s price mirrors that of the U.S. Dollar, it is not the type of cryptocurrency you would buy, and hope that the pricing for it will go high.

#2 – Tether can be Used to Buy Crypto, Encounter Money Transfers and Earn Interest

As a cryptocurrency investment, Tether may not be an ideal investment, but it has several other case uses. The most common reasons you may buy Tether include; 

  • Used to buy other cryptocurrencies: As you must know, transferring money from your bank account to a crypto exchange can take several days. If you intend to have funds in your account to buy crypto in the future, then instead of waiting around, having Tether in your account can help you do so.
  • Money transfer: Tether is a viable option to transfer money between exchanges and crypto-wallets. You can use Tether to transfer money to your own exchange account or to send funds to another person. Moreover, Tether does not charge fees for transactions in between Tether wallets.
  • Earn Interest: You can choose to earn crypto through exchanges, and it is viable to earn 25% interest by lending out coins. The benefit associated with Tether is that the value would not fluctuate. With other cryptocurrencies, you can gain interest; however, you can lose money if the pricing fluctuates.

#3 – Tether Limited is a Bit Controversial

Despite being a stable coin, Tether has reasons to be cautious. Tether Limited, which issues Tether, does not have the best reputation. One major issue is that Tether Limited previously claimed that Tether is backed by $1, and recently it released info that only 2.9% of Tether is backed by cash. Tether Limited has also been a subject of a lawsuit due to an alleged cover-up that is related to a crypto exchange known as Bitfinex.

You May Read: Implementation of KYC Regulations in Crypto Exchange

#4 – Hold Tether in Digital Wallets

You can choose to store Tether in digital wallets or exchanges. If you want, a Bitcoin exchange in the UAE can help you with that. Also, there are numerous options available around the globe and you can choose to store them anywhere you want. The most preferred ones are the semi-hot storage options.

#5 – Use Cases

Tether circumvents the issues of the settlement system by removing currency conversion fees and settling it within minutes, not days. USDT costs nothing in terms of fees. USDT transactions tend to have settlement finality, which implies that once the tokens have been received, the transfer can never be reversed, nor can a financial institution restrict immediate access to funds. 

More use cases for Tether include that it is used for remittances since it solves key problems for workers present globally. Tether has a transparent transaction fee and removes the need for a third party or business.

You May Read: Why Smart Contracts are Pivotal to the Crypto World?

To Conclude 

Tether is one of the most sought stablecoin across the globe. If your radar is in the line for Tether, then you should go forth in choosing to invest and trade for it. It is a viable option to go forward with, especially if the stakes are high for financing.

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