Tether Cryptocurrency, Stablecoin Supply peak $20 Billion

  • Tether Cryptocurrency, Stablecoin Supply peak $20 Billion

    Tether cryptocurrency has been ranked 3rd on rating site Coinmaketcap, although this token is pegged at 1 USD, the current market capitalization has reached $ 15,600,946,693, below Ethereum with a market capitalization of $ 39,426,351,758.

    This suggests an increase in Tether's supply as it becomes an alternative low-cost USD transfer across continents.

    This is certainly an interesting note because during the pandemic this stablecoin has experienced an increase in supply, which means that users have increased significantly even though the economic conditions are in a recession.

    According to Ambcrypto, during the pandemic, all stablecoin market share has increased, especially Tether, which from 2019 is still increasing. The increase occurred over three months, reaching more than 120%.

    What is Tether cryptocurrency?

    Tether cryptocurrency is a crypto digital currency that has a value equivalent to 1 US dollar per token.

    Tether was founded by Jan Ludovicus van der Velde, he is the CEO of Bitfinex and Tether Limited.

    Tether or more commonly abbreviated as USDT, meaning USD Tether, it runs on the Bitcoin blockchain via the Omni Layer Protocol.

    In crypto exchange trading, any USDT token can be exchanged into US dollars via the Tether Platform.

    The special feature of Tether is that its value is pegged at 1 USD no matter on future time the value 1 USDT remains the same, there is no floating exchange rate for Tether.

    However, Tether is not just for making USD transfers as Tether is designed for each token to be represented by the underlying fiat currency. For example USD, Euro, and Japanese Yen.

    Tether is more stable in value compared to other cryptocurrencies which fluctuate on demand and supply.

    Tether's stability makes it a good as intermediate of exchange and value store mode. So that these tokens are not for investment but are more aimed at providing transfer facilities between countries at low costs than through banks.

    How does Tether cryptocurrency work?

    Tether cryptocurrency works under the Omni Platform. This platform provides the foundation of a variety of supported digital assets.

    The first version of USDT was created on the Bitcoin blockchain network using OMNI Layer Protocol.

    The OMNI protocol was designed by J.R Willett in January 2012 and officially launched on July 31, 2013, in the Mastercoin project.

    OMNI is arguably the second tier of the Bitcoin blockchain to which certain features can be added. Not only the Bitcoin blockchain, but USDT also uses the EOS, TRON, and Ethereum blockchains.

    Tether Coin is managed in a state where every 1 USDT in existence equals $1 held in deposit.

    Thus, if the user has 20 USDT and is going to convert to USD then there must be a flat 20 USD. So Crypto exchanges are often required to maintain a dollar reserve to support every USDT in existence.

    Currently, users can only convert USDT to US dollars via some exchanges or via Tether itself.

    Why keep printing USDT?

    Currently, Tether is lower in market cap compared to Bitcoin and Ethereum. However, the stable coin is the most traded cryptocurrency in terms of volume.

    Increasing demand for USDT as it is stable crypto that investors can use to store value. Because USDT is pegged to the US dollar. USDT printing aims to meet the needs of market demand.

    Investors assume if this as a way of storing value because of its stability, based on a centralized fiat currency.

    Meanwhile for traders can use Tether to manage the extreme volatility common with cryptocurrency prices.

    Besides that, Tether's request was encouraged by OTC traders because they wanted to avoid the tight control of Chinese capital. Which limits how much money a person can transfer abroad.

    Where to buy tether cryptocurrency?

    There are several ways to buy Tether, but you need an Omni wallet to store Tether, the first way is to buy from individuals who sell Tether, or choose the second way through buy and sell Tether on an exchange that provides USDT tokens. 

    Buy and sell USDT on the exchanges

    This is the most common and easy to find a method, as many exchanges can trade USDT with other cryptocurrencies. But usually, when listing an exchange, it takes a few steps before you can trade crypto. But it doesn't matter as long as you can fulfill the requirements it will be easy.

    The requirements usually consist of a valid email address, proof of received address. The requirement is said to prevent money laundering with the term KYC which stands for Know Your Customer.

    If the verification process is final, then the next step is to deposit an amount of money to buy or use crypto buying and selling services.

    For this, you need to know the payment methods accepted on the exchange, whether by wire transfer or by credit card and so on.

    If funds are available for flat money in an account on an exchange, then using the platform can buy and sell crypto including USDT.

    Profits or money that belongs to you in the exchange account can be withdrawn or transferred in USDT tokens via the exchanger.

    This is where the importance of an Omni wallet is a place to store your USDT safely and use the wallet to send or receive USDT around the world.

    However you have to know your wallet, whether it is Omni layer protocol or ERC20 for Ethereum blockchain or TRC20 for TRON blockchain. Because typing mistakes in wallet addresses can cause USDT to be lost, so this should be a concern.

    A simple way to distinguish your wallet type is to look at the prefix "0x" for ERC20 based wallets, "bc1" for Omni layer-based wallets, and "TX" for TRON based wallets.

    So before making the transfer, make sure which type of wallet your exchanger uses, you can ask the support service or do a small test, this is to make sure the wallet address is correct

    If you are in a country where there are exchangers that use local currency this will simplify the process, as local bank transfers only require a few easy steps.

    But if you don't find local ones, you can find global ones like Kraken, Binance, etc.

    Tether price prediction

    Although USDT is pegged at $ 1, in exchanges the price is subject to change due to fees charged to users.

    In trading platforms like Tradingview, you will also see the USDTUSD value changing in the range of $ 1,0002 or lower by $ 0.9995.

    This condition is also used by crypto traders to capture possible profits from these changes.

    So what about Tether's predictions for the future? I will review some of the sources that predict the future price of Tether.

    Wallet investor Tether’s price prediction

    Currently, Tether's market capitalization is $ 15,599,832,346 with a value of $ 1,0004 on the Kraken exchange, Wallet investors predict that Tether's price for the forecast year is $ 1,0002, and for the five-year forecast it is $ 1,0004.

    Of course, if you look at these predictions for an investor, this is considered less profitable with a small gain, but in terms of hedging, this is one way that can be done.

    However, most Tether users are to make cross-country money transfers because the fees are lower than conventional methods.

    Short-term forecast 

    Wallet Investor's short-term prediction shows a downward trend in value as seen from the prediction chart below

    Image by Wallet investor

    The value of USDT is predicted to decline but it is still in the range of $ 1, a small transaction value may not change that much, but if the transaction in large numbers, hence the risk and gain are also larger.

    Long-term forecast

    The long-term prediction doesn't change much, with Tether's value in the range of $ 1.

    Image by Wallet investor.

    Based on the analysis using the smart technical analysis method, Tether is not a good asset for long-term investment because its value does not change much.

    Wallet investor is a forecasting site that predicts a lot of stock prices, crypto, forex, commodities, and others. Many investors see this as market research by comparing it with other references before deciding on an investment.

    Gov capital Tether’s price prediction

    Gov capital is also a forecasting site for forex, crypto, stocks, and commodities that makes predictions using technical analysis methods using several variables that are processed into output prediction.

    Based on the analysis, the Tether value in the short term is in a bearish trend, but in the long term, they consider it quite profitable that the value will increase by 0.0490% after a year.

    Short-term forecast 

    Within two weeks it is estimated that Tether's value will fluctuate in the low range of $ 1,000 to $ 1,002.

    Image by Gov Capital

    Short-term predictions do little to gain for the traded Tether.

    Long term forecast

    Almost similar to the prediction of Wallet investors where for the long term the value of Tether will not change much, so to increase the portfolio is bad to buy Tether.


    Image by Gov Capital

    Imagine if you currently invest $ 1000 by buying Tether worth $ 1 while for two years you only get a gain of $ 1002, maybe you will think it's a waste of time.

    Crypto-rating Tether’s price prediction

    Crypto rating is a site that also predicts various cryptocurrencies using a method they call the Crypto Volatility Index (CVIX).

    Based on their analysis, the short-term Tether value is under low volatility, meaning that the change is predicted to be very small.

    While the long-term analysis in the year is also unchanged, the value will remain $ 1 for USDT.

    Image by Crypto rating.

    Digitalcoin Tether’s price analysis

    Digitalcoin is one of the cryptocurrency forecasting sites with a different variable analysis method from other forecast sites so that the resulting analysis is different from the site forecast results mentioned above.

    Based on Digitalcoin forecasting, Tether's value will increase significantly from year to year.

    Their prediction for 2021 is Tether's value is $ 2.58, 2022 is $ 2.84, 2023 is $ 3.68, 2024 is $ 3.98, 2025 is $ 4.54, and 2026 is $ 5.13.

    Below is the graph forecasting by Digitalcoin


    Image by Digitalcoin

    From the image above we see the predictions from Digitalcoin that are different from the predictions of other forecast sites, and show significant bullishness, from year to year the price always increases.

    Why Tether stablecoin market capitalization increase?

    Although stable coins including Tether are pegged at $ 1, during the pandemic the data shows that there has been a drastic surge in stablecoin users. This is certainly a question for analysts to conclude because of the increasing demand for stablecoins. In this case, Tether is experiencing the biggest increase in demand.

    One plausible reason is, during COVID19, many banks lowered their interest rates intending to turn the real sector economy around, because many countries had locked down. For example in America during the lockdown, unemployment soared.

    The data report shows that more than 22 million people have filed for unemployment, which the Fed then prints trillions of dollars to make it easier for banks as well as people.

    That is why there is an increase in demand for stablecoins because people think that investing in banks or treasury bills with negative interest is less profitable.

    Finally, they look for other assets that are considered more profitable, this is the reason for the increasing demand for USDT because it has a function as a low-cost money transfer.

    That reason makes sense for the increased demand for stablecoins, which, according to data from Coinmetric, will be the biggest increase in demand in 2020.

    Source Coinmetrics


    The illustration of the chart above shows the demand for Tether and other stablecoins, which Tether reportedly experienced the largest increase of 80%. Meanwhile, the most printed ones were USDT on Ethererum and TRON with a dominance of 53% USDT-ETH and over 20% USDT-TRX.

    Conclusion

    Tether is one of the stablecoins that was controversial because in an audit there were not enough backup dollars compared to the supply of coins.

    However, developments have led to an increase in users trying to take advantage of the lower costs of transnational transfers.

    During the pandemic, it made this stablecoin experience a tremendous increase, if in the previous year it had not been ranked as the top ten, but in 2020 there was a surprising change in conditions, apart from Polkadot can Chainlink.