You may well think that an article dedicated to a Tether price prediction or the Tether price in general is a little bit strange — it is a stablecoin after all. However, the price of Tether does fluctuate significantly, although it is nowhere near as volatile as non-stablecoin cryptos. This means that staying up to date with the news and the Tether price can make a big difference to crypto traders and investors.
Tether Review – What is Tether?
Tether is currently the third-largest cryptocurrency by market capitalization according to CoinGecko. It is also one of the most controversial cryptocurrencies on the market today for a number of reasons. But, it is important to realize that controversy doesn’t detract from how hugely popular it is.
You will find Tether with the USDT ticker and there are plenty of Tether crypto exchanges. One of the best exchanges for trading Tether is Godex.io. There are plenty of wallet options that support Tether too — the best wallets for Tether are the Ledger Nano X and Ledger Nano S. These are hardware wallets with a wealth of cryptos supported.Tether has been around for quite a long time as it was first launched in 2014. Before that, it had been in the works for two years. Its founders, Brock Pierce and Craig Sellars, first came up with the idea of a stablecoin built on the Bitcoin framework. It was called Mastercoin. Mastercoin, unfortunately, didn’t really hit the ground running, but the concept remained. With the addition of another founder, Reeve Collins, Tether was born.
Why is Tether Controversial?
It would be disingenuous to talk about Tether without addressing a few of the elephants in the room. There are three things that cause concerns about Tether. We’ve outlined them below.
Lying about Reserves
Originally, Tether creators stated that for every Tether, 1 US Dollar would be held in reserve to back the cryptocurrency. Initially, this caused a great deal of excitement as investors were fed up with being stung by market volatility.
Then, investors started to question whether Tether had reserves to back the USDT price and Tether promised an independent audit. The audit never materialized and lawyers for Tether put on record that there were roughly 74 cents for every Tether — not $1 stated by the developers.
This has been further exacerbated because investors don’t know whether the new lower figure is to be trusted. Tether has since refused to have an independent audit to back the new lower amount too.
Regulation is a challenge for most cryptocurrencies at the moment. But, Tether has had a particularly rough time in this regard. In short, if a non-crypto investment product in the United States did what Tether had done above, they would be committing fraud.
This means that US regulators have taken a very close look at Tether. Moreover, they continue to do so, which is having an impact on the stability of the Tether price at the moment.
US Prosecution Pending
The US Justice Department is on a warpath at the moment after a very rough few years where investors have been scammed out of money by crypto projects. This means that there is a handful of court cases against crypto exchanges and cryptocurrencies, which are damaging, to say the least.
Tether is seen as instrumental in fixing the Bitcoin price and this is currently an open high-profile investigation. It is believed that Tether and Bitfinex colluded to fix the price of Bitcoin, as well as mask exchange losses that some estimate to be close to $1 billion.
How these things will play out is anyone’s guess. This is why it is really important to stay up to date with the news.
The Tether price is controlled by Tether themselves. Tether tokens are created by the Tether Treasury to meet the wider demands for USDT. Ideologically, the price should be as close to the $1 mark as possible.
Problems pop up when a deficit in value occurs and the Tether Treasury has to wait for demand to once again pick up until the price of Tether is $1. This means that whilst Tether will not normally spend too much time at a high price, it can spend much longer at a low price.
People that make profit from Tether do so by staying on top of the market and check the price daily (or even more frequently).
Tether Price Prediction for 2020-2021
When dealing with the Tether price prediction, there are a few things that need to be carefully considered. First of all, Tether is a stablecoin and it is in the developer’s best interests to keep the price of Tether as close to $1 as possible.
If USDT becomes volatile, this will be a sign that Tether hasn’t got a good handle on things, and investors get cold feet when this happens. It never benefits a stablecoin to be volatile.
The price prediction is that Tether will always near enough match $1 for 1 USDT and any variance will be minimal. In the past, the price of Tether was rising and falling by quite a lot from that baseline. But in monetary value, we are only really talking about 10 cents per USDT on average.
When you look at the stability of Tether overall — it performs quite well, and this means that there is very little margin for investors. Typical Tether investors report returns of between 1-2% per year, which, in the context of cryptocurrency, is low. But, if you are looking for an investment that gives you about 1-2% of ROI per year with little to no risk, Tether may look attractive.
However, that is the point. Tether for all its faults, is trying to create a cryptocurrency, which functions as a currency that people can rely on. They aren’t trying to create another crypto commodity. This is why Tether continues to grow and continues to be popular. In terms of active trading and transactions, Tether makes a lot of sense.
Disclaimer: Please keep in mind that the content of this article is not financial or investing advice. The information provided is the author’s opinion only and should not be considered as direct recommendations for trading or investment. Any article reader or website visitor should consider multiple viewpoints and become familiar with all local regulations before cryptocurrency investment. We do not make any warranties about reliability and accuracy of this information.