Is USDT worth investing in? What currency is USDT? Why is USDT so stable?

Many people who are new to cryptocurrencies often hear the name \"USDT\". It is actually a stablecoin, which is simply understood as a \"digital version of the US dollar\". One USDT is basically equal to one US dollar. Because it anchors the U.S. dollar, the price is relatively stable and does not fluctuate like other currencies. So is USDT worth investing? Why is it so stable? This article will use simple and easy-to-understand language to quickly understand the characteristics, uses and potential risks of USDT, and help you make informed judgments.

1. What is USDT?

USDT, whose full name stands for Tether USD, is a \"stablecoin anchored to the US dollar\", that is:

1 USDT≈1 US dollar.

It runs on a blockchain (the most common one is the TRC20 chain), and unlike Bitcoin, its core purpose is to serve as a digital dollar.

Many people regard it as US dollars in their digital wallets, which can transfer money, collect money, buy services, etc. across countries.

1. How to buy USDT?

● Centralized Exchange (CEX)

Representative of Binance, OKX, and KuCoin

Apply for an account number → complete KYC→ use a credit card or fiat currency to deposit → buy USDT

● OTC/P2P platform

If the country\'s regulations are strict, You may purchase USDT

● DEX(decentralized exchange)

from merchants or individuals through point-to-point (P2P) methods such as Uniswap, Sunswap(TRON), etc. As long as you already own ETH or other tokens, you can also quickly exchange them for USDT

2. Exchange fee comparison table

2. Is USDT worth investing?

USDT now accounts for 68% of global stablecoin trading volume

In the cryptocurrency market,\"USDT\" has become a Stablecoin that almost everyone knows and knows about. According to the latest statistics, USDT circulation will still account for 68% of global stablecoin transactions in 2024! Many people wonder: \"What is USDT? How on earth does it maintain a 1:1 stability with the US dollar? Is USDT safe? How should I start?\"

This article will answer your doubts once and for all, from Tether\'s history, the operating mechanism of USDT pegging to the US dollar (USDT and the US dollar relationship), to purchasing teaching, risk assessment and latest developments in regulations, and will take you to get a comprehensive grasp of this cryptocurrency star.

More importantly, we will expose Tether\'s \"three major operating mechanisms that have never been disclosed\" and conduct an in-depth analysis of regulatory disputes. Ready to learn about USDT? Let\'s get started!

USDT\'s market value exceeded US$110 billion, accounting for 68.3% of the stablecoin market

If you want to gain revenue through USDT:

You can consider the following options (But pay attention to platform security):

● Deposit USDT into stablecoin financial platforms (such as Binance, OKX, Bitget, etc.)

● Participate in USDT pledge in DeFi projects (annualized income ranging from 3% to 12%)

● Use USDT for spot arbitrage and brick removal strategies

3. Why is USDT so stable?

1. Supported by US dollar reserves

USDT is a stablecoin that \"anchors the US dollar\". Tether claims that for every USDT it issues, it deposits an equivalent amount of assets in its bank account (originally $1 in cash, but now includes a portfolio of cash, treasury bonds, commercial paper and other assets).

Simple understanding:

If you buy 100 USDTs for US$100, Tether Company should deposit US$100 in assets in the bank as an endorsement.

2. Stability mechanism: convertible

Tether promises: You can redeem USDT into the equivalent of US dollars. In other words, in theory, 1 USDT can always be exchanged for 1 dollar.

This mechanism strengthens trust in USDT-even if prices fluctuate, people believe it will quickly return to near $1.

3. Large trading demand to maintain liquidity

USDT is the most widely used stablecoin in the global crypto market. It has a very high transaction volume, and the daily transaction volume often exceeds tens of billions of dollars.

● Most cryptocurrency exchanges support USDT trading

● Many users regard it as a \"safe haven\" and convert to USDT to lock in value when the market fluctuates violently.

In other words:

People use USDT to \"buy, sell, and hedge\", so it has large demand, strong liquidity, and naturally more \"stable\".

4. Psychological expectations + market consensus

Even if the market fluctuates (such as USDT temporarily falling to $0.98 or rising to $1.02), most users believe that it will return to $1. This \"psychological anchoring\" further strengthens stability.

Stability mechanism revealed: The supporting operation behind the 1:1 bill

The goal of the USDT is to remain anchored 1:1 to the US dollar, which means that in theory each USDT should be backed by one dollar or equivalent asset. Tether Company mints or destroys tokens based on market demand: when someone deposits US dollars to obtain USDT, the company adds the same number of tokens; when the holder redeems the USDT, the corresponding tokens are destroyed and the US dollars are returned. This mechanism can achieve a balance between supply and demand and maintain price stability.

Reserves consist of a variety of assets, including U.S. Treasury bonds, cash, corporate bonds, bitcoin and precious metals. Tether publishes a \"consolidated reserve report\" issued by a third-party organization (such as BDO) every quarter to show the structure and total amount of reserves. However, such reports are not equivalent to a comprehensive audit and do not provide in-depth verification of the internal control system. Although the report showed that its total assets were greater than the USDT inventory in circulation, there were still criticisms of the lack of complete audit support. The operating mechanism is relatively reliable on paper, but transparency and external verifiability for users still need to be improved.