USDT is a stablecoin pegged to the value of $1 USD and is issued by the Hong Kong-based private company Tether. Stablecoins are a class of cryptocurrency designed to minimize price volatility by keeping their value as close as possible to that of a certain asset which is considered to be stable. In the case of USDT that asset is the US dollar, although Tether also supports stablecoins pegged to the Euro (EURT), the Chinese Yuan (CNHT), and 1 ounce of Gold (XAUT).
Originally announced in July 2014 under the name “Realcoin”, Tether was founded by Craig Sellars, Reeve Collins, and Block.one co-founder Brock Pierce. The project was rebranded to Tether in November of that year, a month after the first tokens had been issued on the Bitcoin blockchain. Since then, USDT has been updated and is now also compatible with the blockchains of Ethereum, Tron, Algorand, EOS, and OMG.
The price of USDT has remained fairly constant throughout its history, although there have been times it has been worth more or less than $1. If you want to know why this happens then you’re in the right place. We’ve compiled everything you need to know about USDT price – as well as the factors which affect it.
Tether Price History
The price history of USDT is fairly straightforward. As a stablecoin, USDT has always maintained a value which is equal to or close to $1. However, although USDT is designed to always be worth $1, in actuality its price experiences small fluctuations.
The most significant price changes for USDT came in the second quarter of 2017. Its price crashed suddenly so that by 25 April USDT was trading at its all-time low of $0.91. Prices steadily climbed over the next month until USDT reached its all-time high of $1.06 on 25 May. Volatility decreased over the next few months and USDT mostly traded between $1 and $1.02, except for dips to $0.97 and $0.96 in June and August respectively. There were further fluctuations in December which saw prices spike as high as $1.06.
The (minor) volatility continued into the start of 2018, with prices going from $0.98 to $1.04 in February. The next eight months were far more stable, however, with USDT staying within a tight $0.99 to $1.01 range. The end of the year brought some larger fluctuations – USDT spent most of October and November under $1, including a drop to $0.96 on 4 November. December, on the other hand, saw USDT trade at mostly above $1, peaking at $1.03 towards the end of the month.
Prices remained above $1 for the first month of 2019 before hitting a low of just below $1 in the first week of February. There was less change in price for the rest of the year, during which USDT mostly traded between $0.99 and $1.01, except for a dip to $0.98 in October.
USDT again stuck to the $0.99 to $1.01 range throughout 2020, other than a fall to $0.98 in March and a brief upswing to $1.02 in August. The first quarter of 2021 was the most stable period yet. In fact from late September 2020 to the start of April 2021 USDT barely moved more than a fifth of a cent above or below $1.
Analyzing Tether Price History
Traders and investors often use technical analysis (TA) and fundamental analysis (FA) to analyze the price history of an asset. TA involves looking at the charts to make sense of previous price movements. This technique isn’t especially relevant when considering stablecoins like USDT, as the minor price fluctuations it experiences aren’t indicative of a broader trend.
FA, on the other hand, looks at the finances and activities of a company, as well as the state of the wider market and economy. This can be applied to USDT as it is issued by a private company – Tether. Although Tether formally claimed that every USDT token is backed by one US dollar, it is yet to complete an audit of its finances, and in April 2019 a lawyer for Tether Limited claimed that each USDT was actually backed by only $0.74 in cash and cash equivalents. Some may consider this lack of transparency and apparent confusion surrounding the company’s holdings to be a bad sign for Tether’s fundamentals, but that hasn’t stopped people from using it every day.
Some of the largest disparities between USDT and the US dollar came in the second quarter of 2017 when Bitcoin adoption began to really take off. The next big spikes for USDT came at the end of 2017 and the start of 2018 as the Bitcoin bull run was reaching its peak and then crashing (as it crashed, traders flocked to USDT as a sort of safe haven). Also around that time, US regulators issued subpoenas to Tether and to the Bitfinex exchange, with which it has been linked, as part of an investigation into alleged price manipulation. This likely contributed to the instability of USDT’s price in that period.
Factors Influencing The Price of Tether (USDT)
As USDT isn’t actually the same as the US dollar and is instead a derivative representing $1, its price is still affected by the balance of supply and demand on the market, albeit to a much lesser extent than other cryptocurrencies. Even if every USDT is backed by $1, redeeming USDT for US dollars requires work and also incurs transaction costs.
When USDT trades above $1 it is usually during times of downward pressure for the larger crypto market. This is because a sudden rush of negative sentiment can cause many investors to become desperate to sell their coins and move their wealth into a safer asset, which is often USDT as it is much easier for crypto holders to acquire than actual fiat. In fact, in the summer of 2018 USDT accounted for up to 80% of Bitcoin’s trading volume.
If Tether is caught up in any more legal cases in the future it could affect the sentiment around USDT and therefore impact demand for it, leading to more price fluctuations. Technically, it’s also possible that the price of USDT on an unregulated exchange could be influenced by market manipulation such as wash trading.
It’s also worth noting that as USDT is pegged to the US dollar, its price in other currencies will fluctuate in line with the US dollar. Thus, factors that impact the US dollar such as inflation, economic growth, and monetary policy in the US will affect the value of USDT against other currencies.
Live Tether Value and Market Cap
The live price of USDT is close to $1, although it is constantly experiencing minor fluctuations. The volatility levels of USDT are almost non-existent when compared with other cryptocurrencies. The market cap of Tether in USD is roughly the same as its circulating supply, as the market cap equals the number of USDT in circulation multiplied by the price of USDT – which is close to $1.
The current price of Tether is EUR. It has changed by EUR in the last 24 hours and USDT has a 24-hour trading volume of EUR. Tether current Kriptomat ranking is , with a market cap of EUR. It has a circulating supply of .
Tether Price FAQ
What’s the difference between USDT and USD?
USDT is a digital derivative representing the US dollar. Although their prices are very similar, USDT is a cryptocurrency, which means it can be sent between users over the blockchain without the need for any third parties like banks.
Why isn’t USDT always worth $1?
Although USDT is designed to follow the price of the US dollar very closely, as a derivative cryptocurrency it is still somewhat affected by the supply and demand in the markets. As such, during periods of major activity in the crypto market, the price of USDT tends to experience minor fluctuations.
Does USDT have a max supply?
There is no hard cap on the supply of USDT and its issuance is governed by the policies of Tether. As Tether claims that each USDT is backed by $1, its supply is only limited by the cash reserves of the company. In January 2017, there were only 10 million USDT, but by April 2021 the supply had grown to over 46 billion USDT.
Is USDT a good store of value?
USDT’s suitability as a store of value is the same as that of the US dollar. During periods of high volatility in the markets, some traders prefer to hold safe assets like USDT to protect themselves from major fluctuations. However, as the US dollar is subject to inflation, its buying power decreases over time. Therefore, in the long term USDT will gradually lose its value in line with the US dollar.
USDT is a stablecoin issued by the private company Tether with a value that is pegged to the US dollar. As such, its price has barely changed since it was launched in 2014. Although the price of USDT has been as low as $0.91 and as high as $1.06, its fluctuations are usually much smaller.
USDT isn’t subject to large amounts of volatility like the rest of the cryptocurrency market. However, it is still somewhat affected by the forces of supply and demand, and so periods of major activity in the crypto market can lead to a change in USDT price. These changes are usually very small though, keeping the price of USDT very close to $1.
If you want to get started with the most user-friendly trading experience on the market, register with Kriptomat today to begin your journey into the world of Tether and cryptocurrencies!