The idea behind tether is that it is a digital currency that holds the same value as the US dollar.

Take a look at the chart of USDT vs USD on Kraken.

However, the company behind the USDT coin has had some interesting antics over the past year or so.

Tether, which has close ties to the Bitfinex exchange, is supposed to match the amount of USDT with real USD currency held in it's banks. This was supposed to be proved true by an independent audit by Friedman LLP but Tether abruptly ended the relationship with Friedman LLP and it is unclear why.

With no audit complete, no one knows if Tether really do hold the amount of USD that they've issued in equivalent USDT.

Why does this pose a problem?

Tether continuously "print" more USDT to put into the crypto market. What this essentially means is that they release more coins available to trade with onto the exchanges. Much like the quantitative easing process many governments do to release more cash into the society to encourage spending.

The total USDT market cap is over $2.5b - yes BILLION which means they should have the equivalent amount of USD in their bank accounts.

On March 20th this year it was spotted that another $300m was released onto the exchanges. (You can follow the USDT printing through @tetherprinter on Twitter)

You can see through Tether printing how their market cap has grown significantly by looking at Coinmarketcap.com

What this has meant for the market is increased trading liquidity by using USDT as a base currency for trading. Much like when you cash out of traditional shares back to your country base currency, which is a difficult, slow and costly process in the crypto world right now.

Increased liquidity offers more trading and the late 2017 USDT printing coincided with much of the bull run on BTC. Could Tether have had such a big impact on the market?

Who really knows, there's plenty of theories available online and without the validation of independent audits, we will never really know what's going on at tether and if the reported rumours and links are true.

However...

There's no denying that USDT is a very handy coin to be able to drop back into during bear runs or trading between coins on exchanges.

Great news though!

There's new and alternative coins now available.

Trust Token has TrueUSD (TUSD) which has previously been available on Bittrex and HitBTC and today has been released on Binance.

Circle (backed by Goldman Sachs) is also releasing the USD Coin (USDC) which will be made available on Poloniex and partners with Bitmain, the leading manufacturer of crypto-mining equipment.

Both are ERC-20 tokens which are exchangeable 1 to 1 for USD held within their accounts. Trust Tokens are looking to expand their offerings in the future to include TrueEUR, TrueJPY and even using other stable assets such as precious metals (gold, silver) and real estate.

These offerings give us a base currency to use when carrying out crypto transactions and allows greater entry into the crypto markets which is great news for us all who are invested!

North West Cryptonians!

Looking for like minded crypto enthusiasts to socialise with? Join our Facebook group and lets create a community, meetups and events... https://www.facebook.com/groups/cryptocoffeNWUK/