Tether coin (USDT) is a blockchain-based cryptocurrency with coins in circulation that are backed by its partner traditional currency and is trading under the USDT symbol. But for crypto beginners, what is tether coin? What does it do?
Check out everything about the tether bitcoin and how it can affect other cryptocurrency prices.
What is Tether Coin?
Tether was launched in July 2014 as RealCoin and was rebranded as Tether later in November of the same year. The coin started trading, however, in February a year after.
There is a new breed of cryptocurrencies, the stablecoins, and the tether coin is part of that breed. These kinds of crypto coin’s main purpose to keep the stability of cryptocurrency valuations in a market that is otherwise largely volatile like the wide swings of prices in other famous cryptocurrencies such as Bitcoin and Ethereum.
Instead of being used as coins for speculative investments, tether stablecoins are mainly used as a medium of storage of value.
Tether coins were specifically created to bridge the gap between fiat currencies such as the US dollar, Euro, or yen and other cryptocurrencies, offering a more transparent, stable, and low transaction fees.
Tether Controversy
Previously, the tether coin had a lot of controversies, starting from when reports came out that Tether was hacked in November 2017, which led to around $31 million Tether coins stolen.
A few months later, in January 2018, Tether hit another hurdle with the required audit the make sure of the maintenance of the real world reserve never took place. After that, the speculations that Tether doesn’t have enough reserves to back the coin has been rampant.
However, Tether has made a statement that the stablecoin is fully backed by reserves again. On the other hand, the company has promised to release an audit of their tether stablecoin reserves, although it still hasn’t delivered one.
Tether Speculations
Earlier this year, Bitcoin has tracked a surge in price, jumping from the previous $7,000 price to a whopping $13,000. The dramatic increase of the bitcoin price appears to coincide with the new Tether token being created. Similarly, the market cap for the tether coin (USDT) has grown alongside Bitcoin, which had caused a lot of analysts to suspect that the Tether company is creating crypto coins that are not fully backed by the dollar, but of bitcoins instead. According to some analysts, Tether might be using their “stablecoins” to buy bitcoin through Bitfinex, and it might be the reason that has driven its price dramatically.
Overall, the dubbed stablecoin has had a lot of controversies ever since it was launched and started trading a few years back.
