Blog Crypto USDT Crypto: The End of the Road or an Opportunity in the Making?

USDT Crypto: The End of the Road or an Opportunity in the Making?

date July 13, 2022 time 4 min read 354 views

Considering recent events with LUNA and UST, many are feeling wary of stablecoins like the USDT crypto. But is it right to be worried? We’ll outline the ins and outs of the cryptocurrency, along with a bonus on how to use it to make money.

With the collapse of the Luna network and its corresponding stablecoin UST, there has been increased scrutiny on cryptocurrencies that are permanently pegged to another currency’s value. Amid the chaos, tether (USDT) has also lost its peg with the dollar—and despite recovering shortly after, it’s still facing skepticism. Plus, Luna might have been big, but if anything were to happen to USDT, it would send shockwaves through the crypto market and beyond.

But what is USDT crypto, what should you expect from it, and is it worth getting involved in it? We’ll run through all of this, ending on a special opportunity: A way to earn up to 15% APY on USDT right here on our site. Want to know more? Keep reading.

What is USDT?

USDT is a stablecoin that belongs to the Tether protocol. It was first launched in 2014, and it belongs to a firm in Hong Kong that also owns BitFinex (a popular crypto exchange).

Before we answer “what is USDT?” we need to dive into stablecoins.
Before we answer “what is USDT?” we need to dive into stablecoins. (Source: Tether)

However, it’s impossible to explain what USDT is all about without giving a full breakdown of stablecoins themselves, so let’s get straight into it.

A guide to stablecoins

As we’ve mentioned, stablecoins are just cryptocurrencies that retain their value over time because they’re pegged to another asset—usually US dollars, but the same thing could be done with another fiat currency or even precious metals or cryptocurrencies. 

This is possible using one of two ways:

  1. Buying reserve assets that back up each unit of the stablecoin currency one by one. The system then maintains itself through faith in the system.
  2. Using algorithmic formulas and smart contracts to increase or decrease the supply of tokens to maintain a certain value.

Luna’s UST falls into the second category.

Introducing Tether

Now we’ve cleared that up, we can focus on Tether itself. Tether is a stablecoin that relies on reserves, which means it’s in a different category to UST despite seeming the same at first. Plus, Tether reports how much of its reserves it holds in cash as collateral, which helps to prop up faith in the system.

But what makes it special? For one, the crypto community sees it as the undisputed leader in stablecoins—in fact, it’s the cryptocurrency with the third-largest market cap overall. 

USDT is a great tool for traders who want to be able to instantly switch between cryptocurrencies instead of relying on fiat. It’s also a useful tool for blockchain apps and can be used in transactions; for instance, to purchase NFTs or to pay fees within a protocol. It would be tough to do any of this with a cryptocurrency that was constantly fluctuating in value.

However, that’s not to say that it’s without its controversies. In the past, Tether has been in trouble for failing to disclose its accounts. There have also been some bumps in the road regarding its value, as you’ll soon see.

Tether price history

You might think that looking at the price history of stablecoins is pointless due to their very definition, but USDT’s price movements over the last year may look slightly different from what you’d expect. 

Despite being a stablecoin by name, USDT hasn’t always been 100% stable.
Despite being a stablecoin by name, USDT hasn’t always been 100% stable. (Source: CoinMarketCap)

As you can see, there are a few surprising dives and jumps. Typically, stablecoins only divert from their peg by very small fractions as the market adjusts. This doesn’t tend to last longer than a few seconds, but as mentioned, there are exceptions to this rule.

One was when USDT fell to $94.55 versus the dollar at its worst point during the LUNA crisis. It also suffered a blip in June 2022 when major crypto lender Celsius Network paused withdrawals and transfers. This is what you can see in the diagram above.

How to buy USDT

At first, it might seem like there’s little point in buying a USDT. After all, the whole point of a stablecoin is that its value will remain the same over time. What gives, and when it comes to how to buy USDT, should you expect anything different from the process?

One reason to buy stablecoins is that converting between cryptocurrencies and fiat currencies like USD isn’t always convenient. Transactions aren’t always instant, some people find their bank accounts restrict them from depositing money in exchanges, and you may face larger fees by operating this way. In contrast, using a stablecoin guarantees a smooth process when switching between cryptocurrencies—perfect for active traders who want to instantly profit from price swings.

In this case, you can find USDT available to purchase on most major crypto exchanges, including Binance, Kraken, and Coinbase. But what many don’t realize is that they can also earn returns from their tether—here’s how.

How to earn 15% APY on your USDT

Now, it’s the moment you’ve been waiting for: The secret about how you can make up to 15% APY simply by holding USDT.

Although it’s a stablecoin, USDT crypto offers some earning opportunities.
Although it’s a stablecoin, USDT crypto offers some earning opportunities. (Source: Unsplash)

At MyConstant, we offer a range of crypto products, including crypto lending. By depositing your USDT with us, you’ll earn up to 12.5% APY—plus, you’ll be able to withdraw the money whenever you want without facing penalties, and there are no hidden fees. If you thought things couldn’t get better, they can. By joining our membership program, your returns will rise to 15% APY. That certainly beats the banks

Plus, by joining us, you’ll be able to access other perks, including:

  • Up to 18% APR from staking
  • 20% more interest from MyConstant investing products 
  • 20% reduction in borrowing fees on MyConstant 
  • 50% discount on NFT fees through MyConstant 
  • 50% discount on crypto swap fees on MyConstant 

Sound like something you’d like to get involved in? Sign up today to test it out for yourself.

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George Schooling

George Schooling

Invite friends and you both earn 10 USDT when they first lend stablecoins or make a crypto-backed loan

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