Almost all of us are aware of stablecoins in today’s time. These are within a category of cryptos that are backed up by valuable physical assets like gold, silver, fiat, etc. Among these stable cryptocurrencies, a popular one is USDT or USD coin or Tether. A USDT is supported by a US dollar and when the rate of the currency changes, the price of the stable crypto changes. Earlier, the demand for cryptos that could remain somewhat stable rose among investors worldwide. USDT tries to solve instability issues, and in this article, we will understand why USDT is stable.
Why USDT Is Stable After All?
Even the popular cryptocurrencies like Bitcoin, Ethereum, Litecoin, Ripple can show swings from time to time. A range of investors does not want to go for these types of assets simply because they do not prefer volatility with investments. To bring stability in cryptos, stablecoins were introduced before the people. You can invest in USDT by simply reaching crypto exchange platforms like Binance, Kraken, and many others. Chances are that they will be dealing with such cryptos in volumes. Many people are showing interest in non-volatility, so they are making investments in USDT and other stablecoins.
There has been no stablecoin as popular as USDT because it is backed by the most powerful fiat. The US dollar already rules all over the world, and if any crypto is taking its support, the crypto has secured a chance to get more powerful. It is as simple as that. One can also observe USDT as a digital form of the US dollar. When the crypto started the journey, there was a time when people traded with it more often than the largest cryptocurrency itself. This boosted the adoption of other cryptos also, and consequently, they boomed.
USDT also attempts to solve a problem that all the crypto exchange platforms face while getting started. The problem is that they do not have any right to store fiat. USDT allows these platforms to hold the digital version of dollars with themselves. With this, they do not have to worry about anything from the regulators. As they are not exactly keeping dollars, they can have a smooth business while trading with them. USDT has a bright future because the future of the US dollar is bright in itself. People have several options to trade with USDT.
One can easily buy USDT with a credit card or debit card in today’s time. The crypto exchanges and other platforms are allowing you to buy these assets within a few minutes from these services. Even the biggest payment company, PayPal, has entered into the game and you can buy USDT with PayPal also. PayPal has billions of customers, and if it is opening a way for the people to trade with cryptos, this is a good thing. The market capitalization of USDT has doubled in 2021 and is expected to grow more by the year’s end.
The Future Of Stablecoins
Some of the experts point out that the future of stablecoins is still better than that of the other cryptos. To an extent, this seems to be true. When crypto is growing like a real-world asset, it has already proven to exist for a long time. People love to keep cryptocurrencies because they can do transactions anonymously. So, when they are using USDT, they have now the reputation of the dollar. USDT and other stable cryptos allow more and more people to enter into the crypto world and take benefits with time. Also, there remains a balance while merchants use them for trade.
A stablecoin can be also be supported by renewable energy sources or even other cryptos, but that category of coins do not have much stability. The prices of petroleum, mineral, natural gas always change due to the influence of the government. Still, they exist behind the ones backed by fiat. There are more than 200 stablecoins available in the market, and the number is growing as new cryptos are making their entry. Stablecoins have already won adoption, and due to this, other ones will have little or no problem in the future. Some could even beat popular cryptos also.
Final Thoughts
We have seen that a reason why USDT is stable is not that it is supported by the US dollar, but because it is supported by the most powerful currency in the world. You can trade with these stablecoins by approaching crypto exchange platforms. These exchanges allow you to buy USDT with a debit card, credit card and other methods. Stablecoins are only for people who do not crave for volatility the crypto world has to offer. So, they do not grow like the original cryptos in the market. Still, when you HODL them, you HODL the virtual piece of assets of the physical world.