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Tether (USDT), commonly known as USDT, was launched in 2014 and is a type of cryptocurrency known as a stablecoin.
Unlike traditional cryptocurrencies such as Bitcoin ($BTC) or Ethereum ($ETH), which can experience significant price fluctuations, stablecoins like USDT are designed to maintain a stable value over time.
In essence, USDT is pegged to the US Dollar, meaning that 1 USDT is intended always to equal 1 US Dollar. It also can be represented as being pegged 1:1.
Tether also offers tokens pegged to a range of fiat currencies, including the Euro, offshore Chinese Yuan, Mexican Peso, and even gold. However, these have yet to generate as much market capitalization as the US Dollar-pegged USDT tokens.
What is a stablecoin?
Stablecoins are a special type of cryptocurrency engineered to maintain a steady value, typically pegged to a fiat currency like the US Dollar.
They offer stability and security in a realm often characterized by volatility. There are several types of stablecoins:
Fiat-backed stablecoins: Tied to traditional currencies like the US Dollar, ensuring stability through tangible asset backing.
Crypto-backed stablecoins: Supported by other cryptocurrencies, ensuring value through collateralisation.
Algorithmic stablecoins: Utilise algorithms to regulate token supply dynamically, aiming for price stability.
Read our guide on stablecoins here.
Tether’s transparency and reserves
Tether maintains transparency by regularly updating a breakdown of its reserves holdings on its website. As of the 3rd of March, 2024, Tether reported assets totaling $99.45 billion for USDT.
The company disclosed that 84.58% of its reserves consisted of cash, cash equivalents, short-term deposits, and commercial paper, with 76.87% of this portion invested in US Treasury bills.
Additionally, Tether allocated 0.05% of its reserves to corporate bonds, 3.62% to precious metals, 2.91% to Bitcoin, 4.95% to secured loans to unaffiliated entities, and 3.89% to other investments.
Why owning USDT can be useful
Owning USDT, or any stablecoin, offers numerous advantages:
Stability: Shield yourself from the unpredictable swings of traditional cryptocurrencies, ensuring a secure store of value.
Funds for Swaps: Swiftly swap stablecoins for other cryptocurrencies in Best Wallet, facilitating quick reactions to market movements.
Fast and Borderless Transactions: Enable swift and cost-effective transactions globally, ideal for cross-border payments.
Transparency: Many stablecoins undergo regular audits, ensuring complete backing and transparency, and fostering trust among users.
Can I buy USDT in Best Wallet?
Yes, you can buy USDT directly within the Best Wallet app. Thanks to the integration of Onramper, acquiring stablecoins like Tether is seamless and straightforward.
You can also buy other major stablecoins like USD Coin (USDC) and Dai (DAI) in Best Wallet. This can help you deepen your crypto portfolio and react to market movers.
Swapping your USDT tokens
Swapping your USDT for another crypto token is simple and quick in Best Wallet. Respond swiftly to market trends and opportunities by simply swapping some of your USDT funds for a trending meme coin or strong-performing altcoin.
Read our guides on how to swap crypto on the same chain or cross-chain.
Why you should own USDT:
USDT is an excellent option for holding a stable reserve directly within your Best Wallet, providing you with the flexibility to quickly swap into other cryptocurrencies when opportunities arise. Its stability makes it a valuable tool for navigating volatile market conditions.
Tether’s commitment to transparency—regularly updating details of its reserves on its website—helps instill confidence in the stability of its value. While primarily used to hold value during market dips or turbulence, it’s important to note that USDT has occasionally deviated from its peg to the fiat currency it tracks.
For example, during the FTX collapse in November 2022, USDT briefly dipped to $0.995 before rebounding swiftly, demonstrating its resilience.
Despite rare fluctuations, USDT has consistently restored its peg and remains a trusted option for traders. With Best Wallet, USDT empowers you to effortlessly swap, trade, or acquire new cryptocurrencies, making it a reliable cornerstone of your crypto strategy.
Wrapping up
USDT is a widely used stablecoin that offers stability, flexibility, and reliability in an often volatile crypto market. By holding USDT in your wallet, you can use it to get a new cryptocurrency by swapping for it, effectively mirroring a purchase, but all on-chain.
To buy USDT in-app, read our guide on how to buy cryptocurrency in your Best Wallet.
Important reminder: Best Wallet will never request your wallet’s private key or secret recovery phrase. Keep this information strictly private and do not share it with anyone.