A few years ago, in the critical currency market, a new coin was able to combine the advantages of fiat money and the stability inherent in cryptocurrency projects. This digital coin has become Tether currency. At one time, analysts have proposed that this coin will be able to demonstrate a significant increase in popularity and market value, but now most of the news associated with this asset is of scandalous color.
Therefore, it is necessary to get acquainted with this cryptocurrency in detail, and also to find out if the price goes up or down.
Tether (USDT) Price History
USDT cryptocurrency was created as a digital tool for linking fiat currency to cryptocurrency. It can be used as an alternative to the method of confirming the solvency. The crypto community has long discussed the need for such a tool, but it appeared only in 2015.
The head of the Tether company is at the same time the head of the largest cryptocurrency exchange Bitfinex — Jan Louis Van Der Velde. The software protocol developed by Jay Wylett, who previously created the ICO concept, was taken as the basis of the technology used by Tether. In early 2013, Jay developed an advanced protocol Mastercoin, later renamed as Omni. This protocol allowed to create new layers on chains of bitcoin blocks without making changes to the original program code. Such a solution enables the formation of new crypto-assets based on Bitcoin.
The beta version of the Tether platform was released in 2014. The project has managed to collect $200 million. This fact confirmed once again the interest of users to the new system. A stable version of the site was released in 2015. Looking into the past, we can fairly marvel at the success of Tether project. Indeed, as early as the beginning of 2017, the volume of funds providing the cryptoactive USDT was about $ 7 million. But already on September 15, the company’s account was $442.9 million.
Teter also caught one of the peaks of its value at the time of cryptocurrency recovery and as of January 2018 was equal to $1.04.
Tether is supposed to be the digital equivalent of the US dollar. In fact, this cryptocurrency should always be equal to the US dollar, that is, 1 USDT = 1 USD. But is it truly so? The market capitalization of USDT had steadily decreased and recently rose up again during the last time, but due to the latest news the Tether prices crashed down again.
The stable coin is not that stable yet. For most of the month, the USDT traded below the estimated cost of $1.00 per token, dropping to $0.97 on April 29, 2018. What could precede it?
On April 24, 2019, Tether issued 300 million new USDT tokens. Attention to this information was drawn by Whale Alert, a popular service for tracking the movements of large amounts of cryptocurrencies on Twitter.
This data is confirmed by the transaction browser of the Omni protocol, which works on the basis of the bitcoin blockchain. Tether actually credited 300 million new USDTs to its vault. At the moment, it is not known exactly how the company will dispose of new tokens.
According to CoinMarketCap, the issue of USDT today is 2.827 billion tokens. Obviously, the new 300 million tokens is a substantial amount.
The release of a new portion of tokens on Omni looks somewhat strange against the background of plans for a partial transfer of USDT to the Tron blockchain and the addition of support for cryptocurrency by some exchanges. Some users suggested that adding a new blockchain to the USDT system would reduce the emission of a bitcoin-based token.
Tether (USDT) Popularity Trend
Nearly half a billion USDT stablecoins hit the market after the fall in the value of Bitcoin and other coins last November. According to CoinMarketCap, at the moment the number of stable tokens Tether is 2.2 billion, while in the period of market decline, their turnover was 1.7 billion — Bitcoinexchangeguide reports.
According to TrustNodes, the greatest demand for USDT is in China, where one Tether-dollar costs 7.08 yuan, while the Fiat rate is 6.7 yuan to 1 dollar. Large trading volumes are observed in Brazil and South Africa (mainly for international payments). Tether, on the other hand, said that to meet growing demand, the company prepared, but has not yet released another 2.5 billion crypto dollars to the market.
It should be said that USDT is one of the most popular cryptocurrencies in trading pairs, especially with those coins, which can not be bought directly for Fiat.
What may affect Tether (USDT) potential price?
Cryptocurrency researcher Alex Kruger analyzed the situation around the Bitfinex exchange and its related companies and came to the conclusion that the stablecoin Tether (USDT) is provided with currency reserves only 75%.
Based on the information from official documents, Kruger in a series of tweets briefly describes the sequence of events around a well-known trading platform. The first thing he notes is that Bitfinex really had a “hole” of $850 million, formed at the end of last year.
Means “stuck” in third-party processing Crypto Capital. Representatives of the latter claim that they were confiscated by the authorities of several countries. After this statement, Bitfinex management suspected payment processing of fraud.
Kruger stresses that until November 2018, the USDT coins were fully backed by a fiat dollar. However, between November 2018 and March 2019, the Bitfinex Issuer of Stablecoins, Tether, transferred to the Stock Exchange $625 million.
According to CoinDesk, this was done “to solve problems with Bitfinex liquidity, not related to Tether”. Since then, the USDT has ceased to be fully backed by the fiat dollar.
As a result, the analyst concluded that Tether stablecoins are currently backed up by 75% with cash and their equivalents, and by 25% with a loan secured by iFinex shares.
USDT Price Predictions
After the latest news, it is rarely easy to forecast the future of Tether. Nevertheless, some analysts keep guessing the USDT potential future. For instance, analyst JP (@jpthor__) agrees with Kruger’s conclusion that initially Tether was fully secured, but after problems with Bitfinex, it was backed up by only 75%.
According to his note, if the prosecutor’s office in New York is busy with companies, then Bitfinex may cease to exist, but Tether will “survive”.
As for other independent crypto-researchers, Hasu has come to the conclusion that if Tether is provided with 75% of reserves, then Bitfinex can hardly boast such a margin of financial strength.
Earlier, ForkLog reported that investors panicked more than $300 million in Bitcoins and Ethereum.
Despite recent news, USDT is traded on almost all crypto exchanges and has already become a trading pair almost everywhere (like Bitcoin). It is always equal to the Dollar, and therefore should not have big pumps, like other cryptocurrencies. The maximum drop on USDT/USD is not large. The growth of the coin could be only if your national currency falls strongly against the dollar. Simply put, waiting for the growth of the USDT is the same as waiting for the growth of the rates of the usual US dollar.
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