Should i tether

Tether is a stablecoin, or a cryptocurrency that's tied to another asset. In Tether's case, that asset is the U. A company called Tether Limited controls Tether. It's responsible for managing the Tether supply, keeping reserves to back the Tether tokens it issues, and maintaining a stable price. Conversely, when cryptocurrency prices are falling, demand for stablecoins can rise and push up Tether's price.

The idea behind Tether is to turn your cash into a stable digital currency. Maybe you're wondering what the point is, considering there's no potential for huge profits like there is with other types of cryptocurrencies. Even though Tether may seem secure because it's a stablecoin, there have been issues with it and Tether Limited. The reserves for a stablecoin are extremely important. If the company issuing it doesn't have sufficient reserves for the coins it's issuing, then it's essentially creating money out of thin air.

Tether's reserves have been the subject of frequent discussion, and unfortunately, Tether Limited has lied about them before. It used to claim that every Tether was backed one-to-one by a U. That wasn't the case. And in , Tether Limited published a reserves breakdown showing that only 2.

The rest of its reserves are a mix of assets, including commercial paper, secured loans, and corporate bonds. Tether Limited has the same ownership as a crypto exchange called Bitfinex. In , the New York Attorney General filed a lawsuit against the companies alleging that Tether reserves were used to cover up Bitfinex's losses.

According to the lawsuit, Bitfinex used third-party payment processors for customer deposits and withdrawals. The companies didn't admit nor deny wrongdoing. While there are several stablecoins pegged to the U.

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Brock Pierce, one of the co-founders of Tether, was also a co-founder of the Mastercoin Foundation. Right now, there are over 64 billion Tethers in circulation.

That number keeps on increasing as Tether Limited mints more coins. According to Tether, each Tether token is percent backed by fiat currency. The investigation revealed that Tether has been minting coins without any backing in its reserves. In other words, Tether has been printing money out of thin air.

There are allegations by whistleblowers, crypto investors, and law enforcement investigators that Tether Limited is manipulating the price of Bitcoin. The allegations state that Tether is an elaborate scheme where investors print money out of thin air and enrich themselves by buying Bitcoin with it. That hurts the average investor, as purchases of large sums of Bitcoin cause the price of Bitcoin to go up.

Tether's price has also experienced fluctuations, as I will explain in the next section. According to the NY AG investigation, Tether, which is entirely centralized, is controlled by the same people who own Bitfinex.

Finally, Tether Limited doesn't deny that holders of Tether have no legal guarantee that they will be able to exchange their Tether for USD at any time. However, while there is no legal guarantee, Tether holders have never been unable to exchange their Tether for fiat. On the other hand, if you want to be safe, be aware that there is no percent guarantee that you will be able to sell your Tether several years from now.

Tether is one of the top 5 cryptocurrencies in terms of market cap. It is also the single most popular stable coin in the world, by far.