Reasons Why Tether is The World’s Most Used Cryptocurrency Today

tether currency

One of the biggest concerns for a lot of people trading with cryptocurrencies is how to deal with their inherent volatility. It is not uncommon to find coins such as Bitcoin trading at $7,000 today and that figure dropping by $1,000 in just a few weeks or even days. Indeed, this is one of the key reasons why most opponents of this currency form remain coy about investing in them. Cryptohead.io discusses the nature of various cryptocurrency forms in more detail, so be sure to check that out.

The growing popularity of stablecoins

Fearing the volatility of mainstream cryptos like Bitcoin, some developers decided to create coins that are meant to be a lot more stable, hence the name ‘stablecoins’. The reason for their reduced volatility is the fact that their value is often pegged to the value of the US dollar and other fiat currencies. Put simply, these coins are a mix of cryptocurrencies and fiat currencies.

One of the world’s most popular (and used) stablecoins is Tether, a cryptocurrency asset that is owned and issued by a company known as Tether Limited. Like Bitcoin, this currency operates on the Omni protocol and therefore shares the same transaction hash with Bitcoin. But statistics now show that Tether is being used more (volume-wise) than Bitcoin although the latter still boasts more in total value traded every month. Recent data shows that Tether’s monthly trading volume is nearly 20% higher than that of Bitcoin.

What does this imply?

As we mentioned earlier, the relative stability of coins like Tether is the reason they have grown extremely popular among investors, especially those who transact regularly. Naturally, sellers want to be sure that the currency they’re receiving in exchange for their goods and services does not lose value quickly due to price volatility.

Another reason Tether is being traded more especially in the East is the existing ban on mainstream cryptocurrencies like Bitcoin. For example, in China where the use of Tether and similar stablecoins is on the rise, there exists a ban on crypto trading thereby making the use of popular coins like Bitcoin nearly impossible. Surprisingly, the government doesn’t see any problem with citizens paying cash for Tethers which they can later use to trade for Bitcoin and other forms of cryptos. In some cases also, crypto exchanges that don’t have express access to traditional financial services due to legal restrictions often hold their customers’ fiat money in the form of Tether coins. This means that some of their customers do not even know that they are trading these currencies, albeit indirectly.

Should you trade Tether coins?

The answer to this question is, it depends on your investment goals and risk tolerance level. For example, if you have no problem investing in high risk but equally highly rewarding cryptos, then Tether might not be an appropriate coin for you. On the other hand, if you are looking for a currency to use in your day-to-day transactions, then it could be a great option worth considering.

Below, we explain additional benefits of trading Tethers over other forms of cryptocurrencies.

Versatility

One of the key strengths of Tether coins is their ability to facilitate easy transfer of traditional money to digital cash. Besides, the fact that all Tether transfers are completed through blockchain means that they are extremely secure and transactions get completed quickly. Tether coins are also easy to convert into other cryptocurrencies including Bitcoin. This can come in quite handy if you’re in the business of buying cheap and little-known cryptocurrencies whenever they are available at bargain prices.

Acceptance

Due to their rising popularity, Tethers are now widely accommodated in numerous major platforms that deal with cryptocurrencies. What’s more, a lot of platforms that didn’t accept US dollar payments previously now have an alternative in the form of Tether – another reason the currency is reaching even more markets.

Can act as a backup currency

If you are a trader dealing with volatile cryptocurrency forms like Bitcoin and Ethereum, you can use the more stable Tether as your backup fund. The fact that there’s a high volume of this coin in circulation in the money market also means that you can use it without fear to hedge your investments in cryptos.

Conclusion

Tether is here to stay and showing a huge potential of growing even further, not just in volumes but also in value. More and more investors are getting to appreciate its ability to provide liquidity and act as a hedge against market volatility. It is less risky when compared to most typical cryptocurrencies and is an excellent option for people in countries where converting cryptos into fiat is quite a hassle.

Are you looking to trade Tethers? Let us know what you think of this hybrid crypto in the comments below.

Must Know:  How to Buy Cryptocurrency: Step by Step Guide (2019)

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