(Un)Tethered
Ah, Tether. The stablecoin above all stablecoins. The one coin you can trust, that’s “tethered” to the US Dollar…or not. For the uninitiated, Tether is a stablecoin intended to be pegged one to one to the US Dollar. The intent of the coin is to allow HODLers to “hold” US dollars without having to cash out to fiat. This also enables a holder, on paper, to avoid wild price swings seen in other currencies. Tether worked — for quite some time. However, this one to one pegging flailed this week, with the price of Tether actually dropping below $1.

What gives? Demand could be dropping, which can lead, among other things, to a price drop. With a sell off of Tether, the price will drop, and this could lead to a self reinforcing cycle leading to impressions that Tether (USDT) is unstable. With Tether at 99 cents, it becomes more expensive to purchase anything by using USDT. Think you’re unaffected, because you don’t own any of them tethers? Think again. According to researchers at the University of Texas, Tether is used by the larger crypto market to “provide price support” — so even if you don’t own any USDT, a sneeze for Tether could be a disease for the market as a whole.

Furthermore, other stablecoins have been aiming to overtake Tether while it is currently in a weak spot. Tether has also been dogged by controversy: There was some sketchiness in accusations saying that Tethers were created out of thin air along with Tether burning 500 million coins this week. Tether claims to be backed by actual USD, but in reality have actually never been truly audited. In the end, you have to approach all of this with caution — be wary of many things in cryptoland, but especially be careful of your good ol USDT. After all, a dollar may not actually be “a dollar”!

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['The Public Key']
['Blockchain Technology', 'Cryptocurrency', 'Blockchain', 'Ethereum', 'Bitcoin']