Tether is a blockchain-enabled platform, the native token of which is USDT. This crypto is one of a few hundreds of stablecoins that exist today. The price of the token has a direct connection with a fiat currency — USD. The market capitalization of USDT has significantly increased in the last couple of years. It was valued at lower than $5 billion in early 2020 but then surged to more than $80 billion as of April 2022.
USDT has prospects to be transferred worldwide without any commission. It means that you can profitably exchange crypto online with USDT as the base asset.
Why should you consider acquiring Tether, and why is its role in the crypto market essential? Here are the token’s main benefits:
- Low volatility. Most cryptocurrencies experience substantial price fluctuations. In contrast, Tether offers a certain degree of stability. You can expect USDT to stay around its current price in the long run.
- High transaction speed. Conducting business operations with USDT takes way less time than with the fiat currency it mirrors. A single transaction occurs in minutes, while conventional banking sometimes requires waiting for days. It is not the top speed among other cryptos, but still, it is a decent result.
- Low commission. Affordable transaction fees make USDT convenient for money transfers. Moreover, the crypto community was promised that USDT will have zero transaction costs in the future.
- Liquidity. Nearly any wallet and crypto exchange support USDT. Besides, global crypto adoption has made many businesses start accepting payments in this crypto. So, it’s easy to transfer USDT between wallets or conduct payments with it.
- Two-level protection against fraudulent transactions. Every access request to a USDT wallet goes through authentication and authorization protection levels. It includes a full audit of the history of access and changes, geolocation scanning, etc.
USDT comes with multiple benefits, but investors should also be aware of its downsides. Here are the main limitations to consider:
- Reserves issues. Tether owners claimed they fully backed each USDT in circulation with US dollars in reserve. But the truth is different. Cash and its equivalents only count for a small portion of the coin’s reserves. Other assets include corporate bonds, secured loans, and investments. It means a certain lack of regulation over Tether and higher investment risks respectively.
- Lack of mining capability. USDT cannot be mined because of its direct connection to the USD, which makes such an option impossible. Some platforms allow earning USDT by completing specific tasks but be careful to avoid scams.
- Partial anonymity. The problem with USDT is that you need a verified account to purchase it. Therefore, you need to pass an identity check. It involves sending a copy of your ID, passport, and other documents to the relevant platforms. That disrupts the basic idea of crypto trading — anonymity and privacy.
Tether Price Forecast for 2022
USDT is regulated in order to have a price of around 1$ constantly. But it does not trade exactly at this value. It is partially explained by supply and demand rules. For example, there may not be enough USDT for sale. It may happen if other cryptos are falling and many are willing to trade them for USDT while the supply is strictly limited. This will push the price of this stablecoin up.
Another reason is counterparty risk, i.e., the chance that USDT will not perform as expected or lose its trustworthiness. Or just supply would significantly exceed demand for any other reason. It would lead to the price of USDT falling below $1.
In addition to this Tether price prediction, here are some other reliable forecasts that show how USDT price may change in the future, as per the detailed reasons:
- Walletinvestor.com experts claim USDT price to fluctuate in the range of $0.95-1.05 during the next years.
- Capital.com analysts also stick to approximately 1$ per USDT but claim the possibility of a temporary surge up to $1.6 by the end of 2022.
- Gov.capital specialists mirror the previous prediction and claim minor price fluctuations around $1 unless demand for USDT will not significantly overwhelm the supply leading to the surge to $1.67 per coin, of course.
Ultimately, this coin built the current reputation by mirroring $1 accurately. Sudden and significant price fluctuations are rare for stablecoins and bring a rather negative impact on the coin and the market. Tether is likely to maintain the constant course. So those who need to secure their assets from price fluctuation can count on USDT.