When people hear the name of digital currencies, they remember the extreme fluctuations of these cryptocurrencies and stay away from them, but among them there are currencies that do not fluctuate and are known as stablecoins. Tether is currently the most important stablecoin in the cryptocurrency market. You might be wondering what Tether is. In this article, we introduce and review some of the features of this stablecoin.
What is Tether?
A currency that has support and is not affected by market fluctuations is called a stable coin or stable digital currency. Stablecoins are backed by assets or goods, and their value depends on the price of their backing. Now we have to answer the question, what is the basis of the Tether currency? In the case of Tether currency, the dollar is considered as its support. This means that the price of Tether is equivalent to one US dollar. According to the Wallex website, after Bitcoin and Ethereum, Tether is the third digital currency in terms of market value and the largest stablecoin.
You might be wondering what is the need for stable coins like Tether? Due to the extreme fluctuations of cryptocurrencies such as Bitcoin and the low speed of transactions in their network, it was not possible to use these types of cryptocurrencies in daily financial exchanges and contracts, and the need for currencies with a fixed value such as Tether was felt.
Tether is highly dependent on the US dollar and has a one-to-one relationship between them. But what is the reason for the stability of Tether price? The company producing this currency has the ability to issue and destroy Tethers, and this allows him to create this price ratio for this currency and the price of Tether is always one dollar. When the demand for Tether is low and there is a possibility that the value of Tether will go below one dollar, the company will raise the price of Tether by withdrawing the existing Tethers, and if the demand increases, by issuing new Tethers, the price of Tether will rise. also prevents
In general, people look at the advantages of this currency to buy Tether. The high speed of transactions, which provides people with the opportunity to use arbitrage, its low transaction fees, high liquidity, Tether price stability and protection from market fluctuations are attractive factors for buyers of this currency.
Another point that you should pay attention to before buying Tether is the security of this currency. Although the possibility of hacking your personal wallet or exchange wallet can be considered very low, the possibility of bankruptcy of the Tether company still remains. In addition, the dollar, which is the backbone of Tether, is losing its purchasing power day by day, which according to the one-to-one ratio, the purchasing power of your money will also decrease significantly.
Despite all the problems in the legal field and the rumors surrounding the activities of the Tether manufacturer, this currency still has a high reputation among the major exchanges, and traders do not worry much about its maintenance. Tether’s $83 billion market cap has solidified its position as the third-largest digital currency behind Bitcoin and Ethereum, and it doesn’t seem like it will be easily replaced. It is not clear to us exactly what the future of Tether is. The passage of time will make the future of stablecoins and especially Tether more clear for us.
If you are active in the digital currency market, you must be familiar with the famous exchanges in this field. To buy Tether, according to the conditions of the embargo, the best thing for Iranian users is to use reputable exchanges inside Iran. Membership in Valex digital currency market, where it is possible to sell and buy Tether and other cryptocurrencies, is considered a safe way to sell and buy Tether. After registering and authenticating in this market, you will be able to buy and sell easily through your bank account and with low fees.