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How Tether (USDT) Works
Crypto's high volatility has always been its crux. But this changed with the release of Tether (USDT) in 2014 as the world's first stablecoin. Now, traders can rely on a digital currency as stable as fiat but has crypto's liquidity.
Learn the answer to ‘How does Tether work?’ and whether or not it’s a worthwhile investment here at Bitcasino.
Launched in 2014, Tether is a stablecoin pegged to the US dollar. It maintains a 1:1 ratio with USD, making its value in the market more linear and stable.
At the time of writing, it’s the most preferred stablecoin with a price of $1 and a market capitalisation of $67.5 million. Additionally, it holds the spot next to Bitcoin and Ethereum as the third most popular cryptocurrency to date.
The USDT stablecoin maintains its value through minting, purchasing and recalling. The private and centralised company Tether issues USDT in exchange for investors’ fiat currencies which they keep in their reserves. It ensures USDT will not drastically drop or rise from $1.
For example, if you spend $100 to buy Tether, you receive an equivalent of 100 USDT, and Tether keeps your dollars in its reserves. If you want to sell your 100 USDT and get your $100 back, Tether returns your money and burns the returned USDT tokens.
Due to its pegged nature, it’s rare for USDT to go below or above its standard price, but it can still happen depending on the crypto market. For example, if more people want to exchange their digital assets for USDT, trading fees can hike and cause its price to rise.
While other digital assets can drastically rise and fall in value, USDT never deviates far from $1. It’s because, for every USDT in circulation, there is an equivalent USD amount in Tether's reserves.
In terms of how to use USDT, this coin has various purposes.
First and foremost, people mostly use it for trading other coins rather than as an investment. Traders exchange their cryptocurrencies with USDT coins to curve the market’s volatility. Once the cryptocurrency market is less volatile again, they convert it back.
Investors also use the Tether USDT crypto to make quick and easy transactions. Since it has a stable price, there’s no price slippage when using it to purchase goods and services. Plus, USDT allows lightning-fast transactions that range from 5 to 7 seconds.
As the first stablecoin made, USDT brings new advantages to the crypto community. Here are the benefits you can expect when trading USDT:
Price stability is a USDT advantage you wouldn’t find in most cryptocurrencies. With it, you can safe-keep your investments and make secure and fast transactions. If you temporarily convert your crypto assets to USDT, you won’t have to worry about short-term devaluation.
Tether functions on the Bitcoin blockchain network, which means all transactions are permanently recorded. The Tether company also provides transparency reports on their website so traders can get a rundown of the coin’s reserves.
Tether is backed by the Omni Protocol based on the Bitcoin blockchain network’s security protocol. It monitors the minting and burning of USDT and tracks or reports unusual activity.
You can easily swap any coin and even fiat money for USDT in almost any exchange. Moreover, it has a circulating supply of 67 billion USDT and reliable liquidity rates, which means there’s no risk of shortage even if the demand is high.
Transaction costs and fees are also minimal compared to trading to fiat or other cryptos. Depositing USDT is free in all exchanges, but withdrawing costs around 0.02% to 0.4%. On the other hand, converting cryptocurrencies like Bitcoin or Ethereum to fiat and vice versa can cost more, whereas you can save on transaction fees with USDT instead.
Although Tether is expected to maintain a $1 price, it can experience price movement and either go under or over the $1 value depending on the crypto market. It cannot remain in the same $1 range forever because it is only a derivative of the US dollar.
Check out the graph below to see Tether’s performance in the past five years.
Image from CoinMarketCap
As of writing, Tether still holds a value of $1. Its price fluctuates rarely and eventually returns to its $1 value despite rising and falling prices. The digital currency was never lower than $0.9179 in 2017, while the All-Time High was at $1.32 in 2018. With this data, what’s in for the USDT’s future?
Various online platforms and crypto experts have predicted USDT's price valuation in 2022. According to Capital.com, USDT could average $1.30 and even go as high as $1.92 in 2025.
Companies like Facebook, Apple and Netflix had similar predictions. These companies also expect USDT to go beyond its pegged $1 value by 2024 onwards, with forecasts of $1.99, $2.03 and $2.51, respectively.
Due to its benefits and value, Tether is an all-rounder cryptocurrency you need to buy. With USDT, you can avoid extreme market volatility and protect your coins from drastic price changes. For newbies and experienced crypto traders, USDT is a good choice for efficient crypto trading.
Step 1: Head to the exchange platform of your choice
First, choose a crypto exchange platform where you can purchase USDT. Some exchange platforms supporting USDT include Binance, Kucoin and Bitmex.
Transaction fees vary per exchange, so compare first, then choose which one works for you before buying USDT.
Step 2: Use your crypto wallet to buy another cryptocurrency
Next, purchase a digital currency like Bitcoin and exchange it for USDT on your chosen exchange. You can instantly purchase through a broker site like Binance or put through a market order and wait for it.
Step 3: Store USDT in a wallet
Store your bought tokens in a USDT wallet so you can use them for transactions. It can be online or offline, depending on your preference. Most exchanges online already have a wallet where the coins you bought automatically transfer after purchase. However, transferring and storing them in a separate wallet is safer to protect them from exchange hacks.
Step 4: Make transactions using USDT
Now that you have USDT in your crypto wallet, you can use it for all sorts of transactions and trades on the crypto market. It’s also an excellent avenue for crypto gamblers, especially those who place their bets here at Bitcasino.
You can get your hands on USDT through different cryptocurrency platforms; you can do all of this at Bitcasino, so it's easier. Find where you can buy USDT below:
As the biggest and most trusted cryptocurrency exchange in the crypto market, Binance is an excellent place for you to trade and purchase USDT. You can use your credit or debit card or make a bank deposit to buy any cryptocurrency and convert them to USDT. You can even store them at Binance and use them whenever.
Metamask is another reliable option for you to buy USDT. It is mainly a crypto wallet that can help store and transfer your funds.
At Bitcasino, you can connect your Metamask wallet to your account for easy crypto deposits. Go to the ‘Deposit’ tab and transfer your USDT by inputting the desired value and confirming the transaction. The funds should immediately reflect onto your Bitcasino account.
You can enjoy the convenience of buying USDT with Onramper. It is a platform where you can easily buy crypto and transfer it to other partner merchants like Bitcasino.
Choose ‘USDT’ as your preferred currency and select the ‘Onramper’ option. Then, input the amount you wish to transfer along with your email address. From there, you will receive a code via email. Click it, fill up the needed information and complete the transaction.
You can always use the bank transfer option for those who do not wish to make fund transfers or purchases via crypto wallets and exchanges. To buy USDT through bank transfer at Bitcasino, select the 'Bank Transfer' option on the 'Deposit' tab. Then, fill up the necessary information to complete the transaction, and you can now start using USDT at Bitcasino.
Tether is undoubtedly one of the top cryptocurrencies today. It offers casino players like you plenty of benefits such as fast transactions, cheaper fees, and low volatility.
Reap the benefits of using USDT at crypto casinos at Bitcasino, the best Tether online casino for you. Depositing is as easy as scanning a QR code so you can enjoy more seamless casino gaming that’s fun, fast and fair.
Bitcasino is your premier online casino for crypto gambling. To start playing using USDT, here’s a step-by-step guide you can follow:
Step 1 - Make a deposit
On the Bitcasino homepage, click on the ‘Deposit’ tab. From there, choose USDT as your default crypto.
Step 2 - Input the necessary details
Choose your preferred payment method and link your crypto wallet to Bitcasino to ensure the transaction pushes through. Don’t forget to input your personal information and the amount you wish to buy in USDT.
Step 3 - Complete the transaction and start playing
After you have entered the necessary details, confirm your transaction. The new balance will appear in your Bitcasino account in a few seconds. Afterwards, you can place your bets and play slots, live dealers and more at Bitcasino.
Find out some of the best games you can place your USDT bets below:
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Are you looking for a baccarat game you won’t find anywhere else? Bitcasino’s Bombay Club Baruto Baccarat by OneTouch is your best bet. It's suited for high-roller players, and this game offers a minimum bet of 1 USDT to a maximum of 50,000 USDT.
It's an exclusive and exciting baccarat variant thanks to Baruto, Bitcasino's Estonian sumo wrestling ambassador, randomly appearing during the game.
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Tether (USDT) is a stablecoin pegged to the US dollar. It maintains a 1:1 ratio with the US dollar on its reserves to stabilise its price. Like crypto, it uses blockchain as a digital storage and exchange platform. But like fiat, the private company Tether controls its minting.
USDT or Tether can be used for all sorts of activities, such as trading crypto, purchasing goods and services online, hedging price drops and betting. Now, you can play top live casino games not just with Bitcoin and other cryptocurrencies but also with Tether.
Tether and Bitcoin differ because the former is centralised while the latter is decentralised. However, considering USDT is less volatile than BTC, it is used as a tool by Bitcoin traders to convert their coins into USDT to avoid market volatility.
70% of Bitcoin trading nowadays is done through Tether conversion. USDT often has more trading volumes than BTC, earning its spot as one of the top cryptocurrencies in the market.
Tether does not have a blockchain. It functions on the Bitcoin blockchain network and managed by the Tether company. It is also supported by other blockchains such as Ethereum and Tron, to name a few.
At the time of writing, Tether has a value of exactly $1 according to CoinMarketCap and has a circulating supply of 67.57 billion USDT. It also holds the third spot overall in market capitalisation with a value of $67.5 million.
Tether is the most popular and sought-after stablecoin in the crypto market. Despite launching other stablecoins pegged to the US dollar, it remains the most used stablecoin in the crypto market, proving its utility and importance.
Tether is a centralised digital currency because the Tether company manages it. While it is still a digital asset and functions on a blockchain, USDT is minted by the company. It's one thing that sets it apart from other typical decentralised cryptocurrencies like Bitcoin and Ethereum.
Words by: Adi Gregorio
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How Tether (USDT) Works