Today we're going to talk about tether (USDT), one of the most
popular cryptocurrencies in the world. We'll look at how it's created and
managed, the problems it solves, ICO and different tokens built on top of the
Ethereum and Bitcoin blockchains, as well as talk about its price prediction
for this year. After reading this you will have a strong understanding of what
tether is and how does it work.
Tether is the only 100% audited, USD-backed cryptocurrency that is
fully redeemable and decentralized. Whether you are trying to increase your
balance or seeking a haven in the case of an emerging market downturn, Tether
is the best way to obtain and store your wealth without volatility or risk.
Tether (USDT) Collapses to $0.90 on Kraken
Tether (USDT), the embattled stable coin, is trading to a low of
$0.90 on Kraken against the U.S. dollar this morning. The cryptocurrency is now
down over 9% on the day as its 1-week chart shows a downtrend that has
stretched from nearly $1.02 last week to a low of $0.90 today. The coin’s
market valuation is roughly $4,521,846,732 at press time, according to
Coinmarketcap data and market participants speculate what's pushing the price
down.
"I think tether cashing out their USDT for fiat explains most
of the current drop in price," says Nick Kirk from Cypher Capital
Management in an interview with CCN today. "With this best news about
Bitfinex and Tether not being audited by Friedman LLP, it’s looking worse and
worse for them."
According to Kraken's USDT/USD order book, there is over $80
million worth of sell orders between $0.89 and $0.93 at press time while its
order book shows just over $41 million of buy orders between those values as
well.
Tether’s CEO Responds to Market Rumors
First and foremost, Tether is not a security, it is a substitute
for fiat currencies. Tether is not designed to appreciate or interact with the
capital markets. It is designed to maintain a 1-to-1 exchange rate with the US
dollar and be used for transactional purposes.
Tether has never issued unbacked USD tethers. Despite market
rumors, we have consistently stated that Tether is backed by USD reserves at or
exceeding the Tethers in circulation at any given moment, and we’re glad to
finally have official proof of this and are proud of this fact.
The auditor’s report also provides substantial additional support
for Tether issuances and redemptions as well as our monthly reports on our
treasury holdings which are publicly available on our website. The auditor’s
report confirms that all Tethers in circulation as of June 1st, 2018 are fully
backed by USD reserves. We expect the independent accountants' report on those
balances to be published later today.
Tether has long been a topic of controversy in
the cryptocurrency
Tether has long been a topic of controversy in the cryptocurrency
world. The company claims that they have $2.5 billion worth of Tether tokens,
but the evidence is scant. There are also some concerns that Tether tokens may
be used to manipulate the price of bitcoin and other cryptocurrencies, which
would cause problems for exchanges and investors alike.
Bitcoin hit a record high earlier this week (December 17), as it
surged past $19,000 for the first time. The currency was trading at $19,800 on
Coinbase at one point in the day but has since dropped back down to $16,900.
Tether issued 300 million tokens on December 15, which were then
sent to an unknown address. The tokens were then transferred to Bitfinex, one of
the largest cryptocurrency exchanges in the world. Bitfinex has been accused of
pumping up the price of bitcoin by using tethers.*
Conclusion
Our analysis pointed out that tether has an inverse price
correlation to bitcoin, and it is largely affected by the manipulation of BTC
price, so we predict that tether price would recover and even touch $15 as most
bitcoiners would like to buy tether instead of BTC when BTC price falls.
New technologies are making tether mining more viable all the time,
though it may still be best to mine other cryptocurrencies or to hold onto your
coins rather than mining. Mining costs and risks will likely prevent it from
ever being worthwhile, but the future is unclear.
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