Blockchain Investor Analysis

Tether logo

Tether

USDT
Current Price $1.00 (+0.15%)
Tether (USDT) is the market-leading stable digital currency that traders love to use as a base currency to trade in and out of bitcoin and other digital assets. The stablecoin was launched in 2014 by the team behind the digital asset exchange Bitfinex.

Our Rating:

Market

Problem that it solves

The concept behind Tether addresses a concern promoted by many crypto-doubters: There’s no 'real' money behind it. Tether, a stablecoin, is backed by an equal amount of fiat currency for each coin. 1 Tether (USDT) can be exchanged for $1.

Customers

Currently, the main customer base is composed of digital asset traders who use USDT to move in and out of risky assets, such as bitcoin. In the future, individuals and merchants could also use this stablecoins for payments.

Value creation

For digital currency users who are looking for a stable asset to store their funds in, USDT provides an excellent solution.

Market structure

Tether is mainly used by traders. While the prospect of becoming a global, blockchain-based digital dollar for payments is on the table, we are not anywhere close to that yet.

Market size

Tether has value all over the world due to its status as a dollar peg. The market is virtually unlimited.

Regulatory risks

If Tether were to default on its promise, the world of crypto could become destabilized—at least to a degree. Regulators love to try to prevent economic destabilization.

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Competitive Advantage

Technology/blockchain platform

They’ve built Tether has been built on the technology of Bitcoin and can now be used on the blockchains of Ethereum, EOS, Tron and others.

Lead time advantage

Tether was the first stablecoins in the market and has greatly benefitted from its first-mover advantage.

Contacts and networks

Team Tether is connected primarily with Bitfinex, which means that the company has access to pretty much anyone in the market.

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Management Team

Entrepreneurial Team

The people behind the wheel at Tether are not new to the crypto space, and their successes at Bitfinex give them some street cred.

Industry/technical experience

Tether’s troubles are not due to a lack of technical experience. The technology is sound, partially because it’s rooted in the same blockchain that supports Bitcoin. But Tether’s lack of transparency suggests a lack of industry experience.

Integrity

Too much controversy. Too many questions.

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Token Mechanics

Token required

USDT is the first dollar-pegged stablecoin and makes decentralized, peer-to-peer transactions in digitized dollars a possibility.

Value added

As a means to make transactions in a stable, borderless digital currency, USDT adds a substantial amount of value to users. Additionally, for traders who want to temporarily store digital funds in a stable asset, USDT is the market's most liquid option.

Decentralized

It doesn’t get much more centralized than Tether. Even though it exists on the blockchain, its real value is a function of what’s backing it. And the assets behind Tether are held by Tether Holdings.

Token supply

Even though it would take a mass liquidation event to use all of Tether’s tokens, it could happen, particularly because so much Tether is being used by exchanges. If they were to cash in the values of their portfolios, Tether may run out.

Public exchange

Most reputable exchanges support USDT.

MVP

Tether was launched in 2014 and has played an active role in the digital asset markets since then.

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User Adoption

Technical difficulty

Anyone who understands the concept of a dollar-pegged stablecoin can grasp what Tether is. And considering how often 'pegging' is mentioned in financial news, people in that space will easily be able to comprehend the logic behind Tether.

Halo Effect

Tether’s connection to Bitfinex has been a two-edged sword from which it is still recovering. Tether’s adoption has been supported by the strength of the concept behind it and its first-over advantage.

Buzz

When there's buzz surrounding Tether, it is often negative news. However, the company has been innovating and releasing new assets, such as the recently launched Tether Gold.

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Overall Score

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Blockchain Investor Analysis

USDT has established itself as the go-to dollar-pegged stablecoin with the most liquidity despite the many controversies that have plagued the company behind the coin. While the competition in the stablecoin market has heated up in the last few years, Tether remains the market leader. For how long, remains to be seen.

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