Tether (USDT) – Forecast Summary

Tether Forecast: 1st semester 2021
Market capitalization: $ 70B – $ 80B
Price factors: USD Performance, COVID-19, Crypto Market Sentiment
Tether Forecast: 1 year
Market capitalization: $ 150B – $ 200B
Price factors: FED, US economy, cryptocurrency market
Tether Forecast: 3 years
Market capitalization: $ 300B – $ 400B
Price factors: Crypto Market, Tether Adoption, US and Global Politics

Tether USDT started life in 2014 as StableCoin, then changed its name to its final version Tether. In fact, it started as a white paper in 2012 by JR Willett what was published online January 2012. Tether itself was co-founded by Brock Pierce, Reeve Collins and Craig Sellars. Tether was a new cryptocurrency on top of the Bitcoin protocol, but it has added new networks where this cryptocurrency is accepted for transactions and it is still growing, with the massive expansion of the Decentralized Finance DeFi ecosystem, to other blockchain networks.

Tether is part of a strange breed of cryptocurrency considering how most cryptocurrencies have played out over the past year, massively increasing in value as they transform into safe havens. Tether hasn’t budged a bit, but that’s why Tether is different is a stablecoin, some of which don’t really change in value because they are either pegged to fiat currency or otherwise manipulated / manipulated in the same way. that a central bank does. , preventing them from fluctuating in value. Tether USDT is pegged to the US dollar, at a rate of 1: 1, like Tether LTD. claims, this is where it is negotiated most of the time.

Recent changes in the Tether market cap

Period Change ($) Switch %
1 month + 9.43 billion -24.3%
2 months + 14.56 billion -42.2%
3 months + 24.08B + 49.2%
6 months + 33.18 billion + 220%
1 year + 42.52 billion + 647%

Factors affecting the attachment

Since Tether is a stable currency, with a fixed value against the USD, the main factor in its real money price follows the price of the USD. The USD has seen a major bearish move since March 2020, with the coronavirus turning out to be a negative event for the USD, which in turn was negative for Tether as its value declined against other fiat currencies or to other cryptocurrencies. The market cap keeps increasing, as it surpassed $ 40 billion recently, as shown in the graph above, but this has more to do with the adoption of Tether, the expansion to more crypto networks. and the expansion of the DeFi market.

USDT Live Chart

Tether price prediction for the next 5 years

Tether as a stable cryptocurrency

Stable coins have emerged with the increasing popularity of cryptocurrencies over the past decade. These are centralized currencies, issued by a certain company, running on the decentralized blockchain network. Stablecoins are pegged to physical fiat currency, either by allocating a fixed amount of fiat currency for a corresponding amount of Stablecoin, which does not have to be exactly the same if the peg is not 1: 1, or by manipulating the Stablecoin to stay as close as possible to the desired exchange rate, by issuing or extracting these coins from the market, in order to increase or decrease its value. So while other cryptos use Proof of Work (PoW) or Proof of Stake (PoS) to issue cryptocurrencies, Tether uses the Proof of Reserve (PoR) inventory process.

Tether is among the first category of Stablecoins that has a fixed amount of money allocated to keep it, well, stable, hence the name. USDT is issued by Tether which aims to keep the conversion rate at 1: 1 with USD, so it must keep the amount of USDT in circulation corresponding to an exact amount of actual USD plus or minus. It is for this reason that Tether continues to add to the USD reserves as miners continue to mint new Tether coins. USD Tether is considered a dollar cryptocurrency, while there is EURT as well. Being pegged to a real-world currency protects crypto holders, especially those who wish to use them for day-to-day purchases, from extreme volatility, as we have seen in the crypto market since the beginning. fourth quarter of last year.

Why choose Tether and Stablecoins?

With the emerging and eventual growth of the cryptocurrency market, given its extreme volatility, the need for more stable digital currencies arose and Stablecoins arose. Initially, it was Tether that came out, but then other Stablecoins emerged, such as the USD coin (USD), True USD (TUSD), Pazos Standard (PAX), etc. Tether is undoubtedly connected to BitFinex, as the same people who stand behind this crypto exchange like Philip Potter and Giancarlo Devasini, are also closely related to Tether, while the CEO of Tether is JL Van Der Veld /.Tether is also accepted as a cryptocurrency in other exchanges like CoinSpot, Binance, Kraken, etc, which makes it easier to use or exchange for other cryptos. Tether tokens now exist on more than eight blockchains, such as Ethereum, Bitcoin Tron, OMG Network, Solana, etc.

Price stability of fasteners

Although the main reason Tether and other stablecoins appeared was to avoid the craziness of the cryptocurrency market, this market has been really volatile, which has only risen in recent months. Since 1 USDT corresponds to $ 1 of reserves in Tether and the price follows that of the USD, the volatility is insignificant compared to other normal cryptocurrencies. The price stability provided by Tether is also useful for trading cryptocurrencies, rather than using them for another. But price stability is even more important for normal crypto users, who use it to buy and sell products and services every day, online or in normal stores.

Transaction fees

Another hurdle that people typically face comes from transaction fees, which are of considerable value for larger amounts and as a share of funds transferred, especially for smaller amounts. SWIFT (Society for Worldwide Interbank Financial Telecommunication) transfers start from a fee of $ 20 and increase, in many cases, on average to $ 40-50 for smaller amounts, as it usually takes two banks to process the transfer. , the intermediary bank and the receiving / processing bank. . Other payment methods are even more expensive. To name a few, Western Union, PayPal, MoneyGram, etc. where you will have to pay hundreds of dollars / euros for wire transfers. With Tether, transaction fees are close to zero, only standard blockchain network fees apply.

Transaction time

Transaction speed is another reason cryptocurrencies were born, which helps them to become more and more popular. The average transaction speed for bank transfers varies between two and four business days, which including weekends and other holidays can take up to a week. With Tether, transactions only take a few minutes, which means funds can be withdrawn by the other party fairly quickly, and goods or services can be delivered within minutes. It helps different sections of society, such as traders, buyers of goods and services, etc. who need to move funds quickly. It can make a big difference between moving funds in seconds / minutes or in days in today’s digital world.

Expansion of tether adoption

Tether started out as a simple idea at first, with USDT (US Dollar Tether) at a rate of 1: 1 as we mentioned, now there is EURT (Euro Tether), CHNT (Chinese Yuan Tether) and XAUT ( Gold per ounce Tether)). It is also one of the stablecoins with the widest reach on different blockchain networks, such as Bitcoin (BTVS), Ether (ETH), Tron (TRX), EOS, Solana (SOL) and Bitcoin Cash (BCH).

Tether adds new blockchains to the list, which include Polkadot and Kusama. This will further expand an already large list of adopters that we mentioned above. Paolo Ardoino of Bitfinex said the decision to release Tether on Polkadot was made with decentralized finance in mind:

“Our integration with Polkadot serves to support decentralized financial ecosystems that thrive through blockchains. Web 3.0 technologies have seen significant development and we look forward to helping them unlock the valuable Internet. “

Kusama is a “canary network” of Polkadot, so Tether will launch into Kusama as a test before deploying to Polkadot. Kusama is expected to lead the way in implementing further protocol upgrades. Although Polkadot will be launching para-chains a few weeks before Tether launches on the Polkadot network.

Technical Analysis – The 20 SMAs Can’t Catch Up To Market Cap Value

The 20 SMA can no longer catch up with its market capitalization

When we analyze Tether, or USDT, to be more specific, we should look at both the USDT market cap chart and the USD chart. Looking at the daily USDT market cap chart, we see that in the first few months the market cap slowly increased, but then the adoption of Tether increased as DeFi increased as well. In May, the trend started to accelerate as cryptocurrencies began to gain safe haven status and Tether’s market cap now exceeds $ 45 billion. The intervention to increase USD reserves has increased over time and the trend is accelerating with the 20 SMA (gray) unable to catch up with the price since the start of 2021.

The 100 SMA is now used as a support for the DXY

Regarding the USD, we see that the DXY index has been bearish since mid-March last year. The heightened political and social instability in the United States over the past year has turned traders away from the US dollar, which has steadily declined. The USD DXY index fell from around 103 points to below 90 at the start of January this year. Although it has completed all three bearish waves down and since January it is increasing. The price moved above all moving averages on the daily chart which was a bullish sign and the USD stopped falling. But April was once again bullish for the USD as the price falls below the 200 SMA (purple). This could be a comeback before the bullish movement picks up again, as fundamentals only strengthen in the US, but buyers will need to push above the 95 level that has already served as support and resistance, in order to continue the long term trend of becoming completely bullish. At least the 100 SMA (green) serves as support for the moment.


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