One thing we all like to do is speculate on the price of your favorite cryptocurrency. Today, we’ll have a look at Tether, a stablecoin. You might think, why the hell would you do a price prediction for this coin? Isn’t it supposed to stay at $1 dollar all the time? That’s true, but Tether is not a decentralized currency. There’s a big company behind Tether called Bitfinex. It’s an extremely big exchange that has created the stable currency in order to offer traders an alternative to regular fiat currencies, but there’s a lot of controversy circulating around the stablecoin. Let’s speculate a little on the future price, what would happen whenever the price goes below or above $1 and what possible future scenarios there are.
What is Tether (USDT)
It’s quite simple actually. Tether is the digital version of the US Dollar. In short, that’s what Tether is, but in reality, it’s more complicated than that. It’s a digital token backed by fiat currency that provides individuals and organizations an alternative to the traditional fiat-system. In practice, this is mainly used to function as a means of exchange when trading against other cryptocurrencies. On the major exchanges, the tradings pairs with USDT are the most commonly used and carry the biggest volume.
The selling point of Tether themselves is that they do offer their users a decentralized way with blockchain technology of tradings means and currencies, but still have the ability to withhold a stable price. This is, of course, something that’s more difficult to maintain with other currencies that are simply valued based on the demand by the free market. The mechanism to keep tether at 1 dollar is simply swapping the deposited fiat currency for tether. In fact, it’s quite a centralized way of handling this.
The company behind Tether is Bitfinex. One of the leading exchanges that has come up with the stablecoin in 2015. Ever since the big question was whether all the tether that’s printed is in fact backed by actual fiat currencies. It has been a huge debate and nowadays, Bitfinex is still battling this dispute in court in order to recoup close to 1 billion dollars. Where usually we can easily speculate on the price of a coin, it’s a bit harder to do so with Tether. We’ll have a look at what the company has been doing so far and what we can expect in the future if we sketch some possible scenarios.
Tether (USDT) Price Prediction 2018
After the huge bull run of 2017, Tether became the go-to for many traders out there. People saw their funds declining and didn’t want to cash out to regular fiat-currencies immediately. Instead, loads of people started acquiring Tether and the market cap rose far up in the rankings on Coinmarketcap. It had been at number four in terms of market cap for a long time. With every drop in the market cap of Tether, we can see all the other coins going the opposite direction. Many people swap out their Tether for all kinds of altcoins and Bitcoin as they can now benefit from the varying prices of these currencies. Back in 2018, the Tether sage started to develop further and many people started reporting on the matter.
More and more people started digging into what was really going on and not everyone trusted Bitfinex to actually have the ability to back up the required funds. In fact, with every spike in Bitcoin, or a dump, there was something happening surrounding Bitfinex. It goes only to show how much influence this exchange and their stablecoin have had over the course of the years. In terms of price, the value of the token sometimes jumped slightly underneath and above the $1 mark. How that’s possible is simply Tether having to give in to the freedom of this market.
Tether (USDT) Price Prediction 2020
When we’re looking at the next year, it’s a different story. Many people are still using USDT as means of exchange and for the major part, it’s still the preferred stablecoin out there. But, what happened in the past year(s), after all the news surrounding Tether, is new stablecoins started arising. We now have truly decentralized options out there that function as an alternative for Tether. One of these examples is MakerDAO’s DAI, a stablecoin on the Ethereum Blockchain. With all kinds of innovative mechanisms, the currency is in fact backed up by Ethereum and is completely transparent. There is nothing hidden and there is no central party in charge of the currency. Of course, there’s the team of MakerDAO, but in reality, they do not have full control over their own currency. It’s in the hands of the validators of the network.
Currently, DAI is sitting at the 58th spot in terms of market cap, far below Tether as of today. This can change though, not to speak of the other currencies that started peaking around the corner. Binance is one of these parties that have started tokenizing FIAT currencies. They have introduced the BUSD and the BGBP, both stablecoins that are now available on the Binance Blockchain. More and more alternatives are starting to pop up, but on the other hand, Tether is working hard on their transparency matter. They have added support for the Chinese Yen, the Euro and maintained support for the US Dollar. This in combination with several audits that have been performed, Tether now has the long-requested prove that they can back up their claims. The big question is if their past actions, their long-lasting history, can be forgotten by the dozens of investors in the industry.
Tether (USDT) Price Prediction 2021
Looking a year ahead in the future of Tether, we have two possible scenarios. To determine which one is more reasonable and which one we can assume to be true, let’s first have a look at the current statistics. Tether being Tether, they claim to be completely transparent and come up with the following metrics;
Market Cap: $4.133.726.937 USD
Circulating supply: 4.108.044.456 USDT
Total Supply: 4.207.771.504 USDT
The first possibility is Tether remaining to be one of the more dominant parties in the stablecoins industry. They will stay ahead of the competition and stay the leading stablecoin. This can happen when Tether can maintain their current reputation of having the ability to back-up all the FIAT they claim to be having. Their latest audits and reports do show this is true, but the moment this goes wrong, it can get ugly pretty quick. That’s when the other scenario gets into play; Tether going to zero.
Calm down, this will probably not happen in the upcoming year, but it could just become reality. There’s a slight chance that other altcoins in the stablecoins market are performing better, showing more decentralized possibilities or being more innovative. Lately, some new coins like Ampleforth or Bitbay came along that have created new kinds of stablecoins, allowing you to both enjoy your funds but simultaneously enjoy the possibility of a rising price. This has yet to be proven, but that could lead to Tether going down in the current rankings. One thing to keep in mind, whenever there’s something happening around Bitfinex or Tether, the market responds to this. In what way it is hard to tell, but history has shown, something will happen.
Tether (USDT) Price Prediction 2025
One day in cryptocurrency land can seem to look like ages, decades. When we look at the future for Tether in this case, it’s really hard to tell where we are going. The moment Bitfinex can sort their court cases and become a more stable company, we could just see the developments for Tether to go beyond our current expectations. There’s no clear sign that the company behind the project is planning to add additional features or anything similar, but it could just change whenever the more urgent cases are solved. As we do with most price predictions, we have a look at other tech sectors to see where the price might go.
- If Tether has the average YoY growth that the Internet went through by amount of users (in its adoption phase 1995 / march 2017 = $1
- If Tether has the average YoY growth that Facebook went through (in its adoption phase 2004 / 2016) = $1
- If Tether has the average YoY growth that the Mobile Phone went through (in its adoption phase 1993 / 2013) = $1
Okay, I think we can all agree that there’s no room for growth for Tether, that’s not their goal. We do not give any financial advice but do keep in mind that Tether should be used as a means of storing your funds. Whenever you want to benefit from having a token become more scarce over time like Bitcoin, change your Tether for your desired currency. Do you have lots of your funds stored somewhere safe in Tether? Good for you.
All you have to do now is keep an eye on what’s happening around Bitfinex and Tether to make sure nothing weird happens to the coin. All that’s left for you to do is enjoy the fact that you are in total control of your own currencies, no one else is.
Originally published at https://changenow.io on November 6, 2019.