Buying Tether (USDT): How to invest in Tether?
The crypto market has grown strongly over the years and more and more cryptocurrencies have been added. Besides that, more and more people are investing in crypto. One of the cryptocurrencies you can invest in is Tether.
Tether fulfils the role of a stable coin on the crypto market. This is a digital currency that can be used to convert fiat money into crypto money. Tether is currently being hailed as one of the best stable coins in the world. This is exactly why it can be beneficial to invest in Tether.
The crypto currency associated with Tether is also referred to as USDT. Despite the fact that Tether completes the role of a stable coin, you can simply buy this cryptocurrency at various brokers on the Internet. There are also different types of wallets where you can store these tokens. In this article you will find all the information you need to know about Tether before you start investing in it.
How to buy Tether?
Tether makes it possible to convert fiat money into a cryptocurrency. Tether’s token is also called USDT and its value is equal to the US dollar. This allows you to do normal bank transactions without having to go through a real bank. This stability makes it interesting to buy Tether USDT, for example in order to subsequently use it to buy other cryptocurrencies.
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What is Tether?
Tether is a fintech concept that can be used to convert fiat money into cryptocurrencies. Fiat money, also known as fiduciary money, is a very popular concept on the crypto market. In short, fiat money can be seen as the ‘real’ money which is currently used as legal tender. Think for example of pounds or dollars.
Because Tether is an intermediary between fiat money and cryptocurrencies, its value is also indirectly related to the value of the dollar. Cryptocurrencies that are linked to fiat currency are in turn called ‘stablecoins’. So, you could say that Tether is a stablecoin.
The promise of Tether is therefore that the value of the token of this cryptocurrency, the USDT, will always be equal to the value of one dollar. However, this is only a promise. Tether’s blockchain is public, but Tether’s bank account is not. Outside of Tether’s team, no one knows if there are enough Tether crypto coins to collateralize every dollar.
What are the applications of Tether?
As already mentioned, Tether is a so-called stable coin which forms an intermediary between fiat money and crypto money. Tether makes transactions over the internet which remain equal to the US Dollar. In this way it distinguishes itself from other cryptocurrencies. After all, because the value of one USDT remains equal to the value of one US Dollar, the USDT is not very volatile.
Another advantage of the USDT is that it can be stored in an online wallet alongside other cryptocurrencies. This way traders or investors do not have to take into account the volatility between different cryptocurrencies.
How can 1 USDT always be worth as much as 1 dollar?
Now you may wonder how it is possible that one USDT always remains worth the same as one US Dollar. To achieve this, Tether uses the so-called Omni Layer platform. This platform receives all information about deposits or withdrawals of fiat money. In addition, this platform also keeps track of how much USDT is issued or withdrawn. This way the balance between the value of USDT and US Dollar is maintained on Tether’s account.
Is Tether reliable?
For a stable coin, it is obviously important that it gains a lot of trust from traders and investors. After all, as a trader you must be able to trust that a stable coin will actually retain its value. As already mentioned, the team behind USDT is not completely transparent with regard to the amount of crypto money and the amount of fiat money in Tether’s bank account. Is there really as much Tether as US Dollar?
The only thing the team of this digital currency has ever released about the cash is that the cash does not only consist of US Dollars. Part of Tether’s collateral therefore also consists of other cryptocurrencies. Because the team is not entirely transparent about the amount of liquid assets, it is also difficult to determine whether the organization has sufficient collateral to bring out a good stable coin.
However, at the moment Tether is one of the most widely used stable coins in the world. This indicates that there is at least enough confidence from traders in these digital coins.
The future prospects of Tether
For investors, it is advisable to invest in Tether at this time. At the moment, it is relatively favourable to invest with fiat money and thus to buy USDT crypto coins. However, due to a small scandal in 2018, the value of one USDT is currently not quite the same as the value of one dollar. Therefore, it is not wise to exchange your USDT crypto coins for dollars right now.
If the values are equal again in some time, then this is a wise move. If you invest in Tether now, it is possible that you will make a lot of profit in the future. Of course, the crypto market is still developing, so the prices may fluctuate slightly and a positive future is not guaranteed.
How to buy Tether?
Despite the fact that Tether is a stable coin, and therefore has a slightly different role than most cryptocurrencies, you can still buy Tether in the same way. There are simply brokers who offer various cryptocurrencies, including the Tether cryptocurrency. You can easily pay via bank transfer, with a credit card or with another cryptocurrency.
When buying Tether’s cryptocurrency, it is wise to do some research on the various brokers to see if they offer this cryptocurrency. Not all brokers support Tether and the brokers can also differ in transaction costs. To get the cheapest possible deal, it is therefore wise to compare several brokers before you buy Tether crypto coins.
Storing tether in a wallet
When you have decided to start investing in the digital currency of Tether, it is of course important that you can safely store your possessions. For this, you can make use of a so-called wallet. A wallet is a kind of online or offline wallet in which you can store cryptocurrencies.
Most brokers offer secure wallets which are also suitable for the cryptocurrencies they sell. There are roughly two kinds of wallets in which you can store your cryptocurrency. You can do this in a digital wallet or in a hardware wallet. Each of these wallets has its advantages and disadvantages, and it is wise to weigh these before making a choice.
Digital wallet
If you want to have access to your wallet at all times, a digital wallet is best suited to you. A digital wallet is also called an online wallet and uses a Cloud on the internet to store your crypto money. This way you can access your wallet at any time when you have an internet connection. The disadvantage of this type of wallet is that your digital coins are stored on the internet, making them more susceptible to internet criminals.
Hardware wallet
Meanwhile, it is also possible to store Tether’s cryptocurrency in a hardware wallet. This type of wallet is also called an offline wallet. This wallet is available offline and can be stored on external hardware. The disadvantage of this wallet is that you don’t have access to it at all times on every device like with a digital wallet. The advantage is that this wallet is well protected against internet criminals because it is offline and therefore does not require an internet connection.
Investing in Tether
Is your wallet richly filled with Tether’s cryptocurrency? Then you can start investing. At a certain moment, you buy a certain amount of cryptocurrency. You leave these in your wallet for a certain period of time, while you follow the price, or not. When the price is favourable and your digital coins have risen considerably in value, you can sell them to make a lot of profit.
Strategies for investing
When investing, it is of course important to keep a close eye on the price of the relevant cryptocurrency. Apart from that, it’s also wise to carefully think about the strategy you’re going to use while investing. When investing in digital currencies, there are two different kinds of strategies you can use.
In case of the long-term strategy, you’re going to keep the coins in your wallet for a longer period of time, and you’re going to base your actions especially on the development of the price over a longer period of time. When you use the short-term trading strategy, you follow the price more closely, and you are active in trading on the crypto market.
Auteur
Over Alex Mostert
When I was 16, I secretly bought my first stock. Since that ‘proud moment’ I have been managing trading.info for over 10 years. It is my goal to educate people about financial freedom. After my studies business administration and psychology, I decided to put all my time in developing this website. Since I love to travel, I work from all over the world. Click here to read more about trading.info! Don’t hesitate to leave a comment under this article.
