With its value linked 1:1 to the U.S. Dollar, Tether is useful for short-term holdings. But it’s not a long-term investment.
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Approximate Market Cap: $24 billion
Year Established: 2014
Cost Per Transaction: Nominal
2020 Return: 1%
Score: ★★
Tether is the world’s largest “stablecoin.” Its value is 100% linked to the U.S. Dollar. That means no matter how high or low other cryptocurrencies go, Tether will theoretically stay at $1. That makes Tether useful as 1) a currency, 2) a short-term savings tool and 3) a method of arbitrage between different exchanges.
As a long-term investment, however, it’s not particularly interesting. Tether’s value won’t ever deviate far from $1. Past accounting scandals have also threatened the coin’s stability. In 2017, the coin dropped to 92 cents, and controversy seems to keep cropping up every couple of months.
Nevertheless, Tether is still useful for transferring cryptocurrency between wallets without major price risk. And with many exchanges now offering up to 12% interest on stablecoins, it’s a currency that still shouldn’t get overlooked in 2021.