USDT (USDT)

USDT is a stablecoin issued on various blockchains and whose value is backed by that of the US dollar (USD).
Created in 2014, it plays a pivotal role in the crypto-asset ecosystem: its price always remains close to $1 and allows you to quickly protect yourself from market volatility without exchanging your crypto-assets for fiat currency.

• USDT is a crypto-asset in the stablecoin family: it is an asset whose value replicates that of a fiat currency.
• USDT replicates the value of the dollar, its price remains very stable compared to other crypto-assets.
• USDT is the leading stablecoin.
  It was created in 2014 and by 2020 accounted for around 75% of usage on this market, with an average daily trading volume of $75 billion.
• On November 24, 2024, USDT is the third most capitalized cryptocurrency on the market, with $132.678 billion in market capitalization.
• The USDT is the subject of regular controversy, particularly concerning its fractional reserves, which are supposed to guarantee the value of the asset.

JR Willett developed the beginnings of USDT in a white paper in 2012.
In it, he described the possibility of creating additional currencies on top of the Bitcoin protocol (Bitcoin courses), via new layers.
At the time, he was working on Mastercoin, a cryptocurrency in which he implemented this idea.
Mastercoin thus became the basis for Tether (the parent company of USDT), and one of its founders, Brock Pierce, would come to be known as a co-founder of Tether.
Realcoin was announced in July 2014.
It is the direct ancestor of USDT.
The first tokens are issued in October 2014 on the Bitcoin blockchain.
The Omni Layer protocol was used.
At the end of the same year, Realcoin officially became Tether.
The company is based in Hong Kong and Switzerland.
A private beta version was launched at the same time, with the promise that each Tether + token would be 100% guaranteed in its original currency.
Three currencies are involved: dollars (USTether), euros (EuroTether) and yen (YenTether).
Crypto-trading platform Bitfinex, one of the world’s largest sources of Bitcoin exchanges, added USDT in 2015.
An initial controversy erupts in 2017, when links between Bitfinex and Tether are revealed, casting a pall over the platform’s supposed neutrality.
In 2017, Tether was released on Litecoin‘s Omni layer. Later that year, Tether launches dollar and euro tokens on Ethereum.
In 2018, Tether alone accounts for almost 80% of Bitcoin transactions.

Other controversies arise around this time, including suspicions of Bitcoin price manipulation. A lawsuit is filed in 2019 by the New York State Attorney General.
Bitfinex is accused of using Tether reserves to cover its losses.

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USDT (Tether) is a stablecoin widely used in the cryptocurrency ecosystem.
It is designed to maintain a stable value by being backed by the US dollar, meaning that each USDT is supposed to be backed by an equivalent reserve of dollars.

This 1:1 parity with the USD makes it a valuable tool for traders and investors looking to avoid the volatility of other cryptocurrencies while retaining the ability to transfer funds quickly and cheaply across trading platforms and DeFi (decentralized finance) applications.

USDT also facilitates the transition between cryptocurrencies and fiat currencies, simplifying transactions.
However, debates persist over the transparency and verification of dollar reserves, raising questions about the long-term security and stability of USDT.

This crypto offers definite advantages:

• USDT is indexed and has its reserves in dollars, a currency that to this day remains powerful and stable enough to guard against cryptocurrency volatility.
• USDT is fast and convenient for online payments.
• Transactions are inexpensive.
  Transfers from one USDT account to another are free of charge.
• In 2024, USDT will remain the most widely used and capitalized stablecoin.
• USDT is easily integrated into trading platforms, so almost all of them offer pairs for trading.
  This helps protect traders’ and companies’ funds.

• Blockchain:
  • USDT is available on several blockchains, including Bitcoin (via the Omni layer), Ethereum (as token ERC-20), Tron, EOS, Solana, and Algorand.
    Each version of USDT is specific to the blockchain on which it is issued.
• Centralized control:
  • Unlike decentralized cryptocurrencies, Tether Limited controls the issuance of new USDT, which implies centralized management of the total supply in circulation.
    Users must trust the company to maintain 1:1 parity between USDT and the US dollar.
• Market capitalization:
  • USDT is one of the most capitalized stablecoins on the market, with a market capitalization in the tens of billions of dollars.
    This reflects its popularity and adoption in the cryptocurrency markets.As of August 23, 2024, Tether’s capitalization is $118 billion.

In 2023, Tether made news by investing $420 million in Bitcoin (BTC) mining in Europe, via the acquisition of 10,000 units of H100-type GPUs from Northern Data Group, a German company.
These chips are highly sought-after in both the crypto-currency mining and artificial intelligence sectors (see our article “crypto AI in 2024“).

By investing in Northern Data Group, Tether is positioning itself as a key player in the field of artificial intelligence in Europe.
This move is part of Tether’s strategy to expand beyond its role as a simple stablecoin issuer.

The company is diversifying by investing in areas such as energy production, Bitcoin mining and communication technologies.
With this initiative, Tether becomes one of Europe’s leading GPU cloud operators.

• Create an account:
  • Go to the Coinhouse website and register by creating an account.
    You’ll need to provide personal information and a valid e-mail address.
• Identity check:
  • In order to comply with regulations, Coinhouse requires verification of your identity.
    You’ll need to upload a valid ID and proof of address.
    Once this step has been completed, your account will be activated.
• Depositing funds:
  • Before buying USDT, you need to deposit funds into your Coinhouse account.
    You can deposit euros via bank transfer or use a credit card.
    The funds will be available in your account once the deposit has been processed.
• Buy USDT:
  • Go to the cryptocurrencies available on Coinhouse and select USDT (Tether).
    Enter the amount you wish to purchase in euros, then confirm the purchase.
    USDT will be credited to your Coinhouse account once the transaction has been completed.
• Storage and management:
  • You can choose to store your USDT in your Coinhouse account or transfer it to a personal crypto wallet for added security.
    Coinhouse also offers secure management services for your digital assets.
• Sell or trade:
  • If you wish to sell or exchange your USDT, you can do so directly on the Coinhouse platform.
    Access your portfolio, select USDT, then choose the “Sell” or “Exchange” option according to your needs.

USDT is a crypto that raises many questions.
While it is popular and, in theory, quite safe, regular controversies cast a shadow over USDT.
Against this backdrop, what is your opinion of USDT?
This crypto-currency offers definite advantages, providing reassuring and undeniable protection against market volatility.
Tether therefore seems “too big to fail”.
Representing 75% of the stablecoin market’s valuation and almost all its volume, it remains an indispensable asset for speculators who need to be able to quickly rebalance their positions in a relatively stable currency.
The market as a whole prefers to turn a blind eye to the weaknesses of the Tether model.
Cynical observers may draw an easy parallel with the classic business model based on debt management.
Tether has comfortable financial reserves and won’t be competing so easily.   After all, the motto of the currency that parent company Bitfinex used for its fundraising is Unus Sed LEO: “alone but a lion”.