Issued by the Hong Kong-based company Tether, a sister company to Bitfinex and subsidiary of iFinex, USDT is a stablecoin pegged to the value of the U.S. dollar. Initially launched as Realcoin, a ‘layer-2 coin’ that ran on top of Bitcoin, it was renamed to USTether before finally settling on USDT.
Tether was soon updated to function on the Ethereum blockchain as an ERC-20 token and later adapted to run on EOS, Algorand, and OMG. Stablecoins like USDT are traded at a fixed value on exchanges, but Tether’s value has been known to fluctuate from time to time.
The cryptocurrency market is volatile, so much that fortunes can become worthless in a matter of hours. While Tether hardly ever experiences fluctuations beyond a few cents, there have been brief instances of severe volatility, with one causing the market to trade the token as low as $0.88.
Having a centrally controlled supply, Tether mints USDT whenever needed, promising a 1:1 backing with real U.S. dollars in exchange for the tokens. In 2019, Bitfinex was accused by the New York Attorney General of using Tether’s funds to cover-up $850 million in funds that were missing since 2018.
While the company has been shrouded in controversy regarding the validity of its 1:1 backing claim, USDT is still the most popular stablecoin in use and the fourth-largest cryptocurrency by market capitalization. Its utility in trading is invaluable, allowing investors to quickly exit the volatile crypto markets into a stable position without cashing out into a fiat currency.
Tether currently has a market capitalization of nearly $20 billion.
Kriptomat offers the lowest possible market USDT price in euros (USDT to EUR).
Check out how to buy Tether on Kriptomat.