The cryptocurrency world is a vast one and bigger than you can even imagine. Thus, there are many important terms that you have to know in the cryptocurrency market such as altcoin, HODL, and what not. One such term is stablecoin. Stablecoin refers to those cryptocurrencies whose value comes from being attached to another currency or any other financial instrument. Another very important and distinguishing feature of stablecoins is that they aim to reduce the price volatility to a level. These coins run on an algorithm that helps with their creation of them. One might argue that the volatility is the beauty of the bitcoin ecosystem such as bitcoins. However, such fluctuations are beneficial for traders but pose negative impacts on those who use cryptocurrencies for daily purchasing. This is when the Stablecoins step in. One of the most successful and reliable stablecoins is none other than Tether. It has got a market cap value of 73 billion dollars at present. It would only keep on rising without any cease.
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Basics of Tether
Tether (USDT) was first launched in July 2014 as a Real Coin by a Hong Kong-registered company iFinex. It was subsequently rebranded to its name in November 2014. Tether was first based on the bitcoin blockchain but can now support Ethereum, TRON, OMG Network, and other such variations as well. This coin started trading in February 2015. Currently, it is the world’s largest stablecoin and the third largest cryptocurrency, after Bitcoin and Ethereum. There are reports which show that tether accounted for about two thirds of the transactions of bitcoin by value. Tether is the most important tie to the US Dollars. However, one might also seen variations where Tether has been tied to Yuan, Pesos, and Euros. The main reason for introducing such stablecoins into the crypto market was to address the volatility problems. With the stablecoins being pegged by fiat currency, it stabilizes their price and hence also provides a good value to the existing cryptocurrencies.
Since the prices are stable enough to carry on with daily transactions, it is more profitable to have such coins in the market. In addition to this, you might also see that most of the time the existence of stablecoins leads to making healthy predictions for the crypto markets.
Where can you find the tether?
Similar to other cryptocurrencies, you can easily find Tether on various cryptocurrency exchange platforms. They can easily be brought and traded on such platforms. This is one of the most common ways by which you can buy and sell Tether. However, some may say that the prices on such exchange platforms keep fluctuating but that is not true. Tether only saw a fall in the price after another stablecoin Terra UST fell earlier in the year. However, you will find many large institutionalized investors also heavily rely on using the crypto exchange platforms for storing their cryptocurrencies as well as for trading. Such incidents can help you understand the importance of crypto exchange and trading platforms for crypto investors and enthusiasts at ease. One such great platform is Bitcoin evolution.
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Why tether is the most successful stable coin?
Just like other cryptocurrencies, there are also many stablecoins available in the market to choose from. However, tether always comes out on the top as the collateral which backs the value of tether. The entire process leads to a better valuation in the market for Tether. In addition to this, one might also see that Tether follows the “I owe you model” which means that there is a central entity that back the value of stablecoin and the issuer promises to redeem the investments at any given time.
Therefore, you can conclude that Tether is a stable coin that is backed by the value of the US dollar. Stablecoins make life easier for investors as well purchasers. This way they do not have to constantly function in the fluctuating prices of their preferred mode of cryptocurrency. However, even before you start investing more into the cryptocurrency market, it is highly recommended that you do extensive research of your own to determine what works for you and what does not.