Tether (USDT) is one of the best known and also most discussed cryptocurrencies on the market. But how stable is this currency as an investment and what are the cryptocurrency predictions for 2023-2026?
USDT: Main features
To make a prediction, it is first necessary to understand what the cryptocurrency actually represents. Tether belongs to the group of stablecoins. This means that its value is fixed in relation to another currency. In this case, the USDT exchange rate should reflect the value of the US dollar. Tether is also pegged to the euro and has the abbreviation EURT. USDT is the most commonly used option. Tether is designed to provide protection against the still frequent fluctuations in cryptocurrency exchange rates. The dollar is also subject to exchange rate fluctuations, but compared to cryptocurrencies, it is not worth describing. Each token must be backed by fiat currency reserves in accounts controlled by Tether Limited.
USDT perspective: important factors
To decide whether an investment in Tether is the right choice, several factors must be considered. These are the most important arguments for the success of Tether:
- Accessibility: Tether can be traded on most major exchanges. It is therefore easily accessible and increases the currency’s credibility in the eyes of ordinary investors.
- Bridge between cryptocurrencies and fiat currencies: Many exchanges do not accept fiat currencies. However, since Tether is tied to fiat currency, it is a great way to bridge between fiat currency and cryptocurrencies.
- Less volatility: in times of volatility in the cryptocurrency markets, stable currencies like Tether offer a safe haven to avoid losses. Tether is an excellent option for those seeking to weather adverse market conditions. Its value remains largely unchanged, even if the prices of other cryptocurrencies fall.
- Lightning: the cryptocurrency platform Bitfinex plans to offer Tether on the Lightning network in the near future.
However, there are sceptics about the secure future of Tether:
- Bitfinex-affair: Tether is part of Tether Limited. However, it has the same CEO as the cryptocurrency platform Bitfinex. For this reason, it is often claimed that Bitfinex owns Tether. Although USDT is presented as a stablecoin, some analysts believe that it is actually intended to artificially drive up bitcoin prices. Several analyses and reports to this effect have been provided.
- Backed byreserves: Tether claims that all USDTs issued are backed by an equivalent amount of US dollars. In recent years, there have been claims that these funds do not actually exist. However, there are statistical analyses indicating that Tether may have sufficient reserves.
- Adoggi, there was no audit: to clarify the allegations, the company promised to conduct an independent financial report. However, in January 2019 they suddenly parted ways with the auditor Friedman LLP and the examination was cancelled.
- Possible collapse: the above points do not put the company in a particularly positive light. However, the collapse of Tether would have serious consequences for the entire market. Since it plays an important role in the market structure. The company is closely linked to Bitfinex, one of the largest exchanges on the market. The price of Bitcoin and Tether are also highly correlated. USDT is one of the most popular means of payment and trading combinations. Even the fact that the US Commodity Futures Trading Commission is interested in the activities of Tether and Bitfinex does not improve the current situation.
- Risk of hacking: In November 2017, the Tether service reported the theft of nearly $31 million worth of coins. According to reports, although no funds were stolen from customers, the situation could raise public doubts about reliability and security measures.
USDT Price Predictions for 2022 – 2026:
As a stable currency, Tether (Tether’s official website) is relatively stable in its pricing and is based on the US dollar. Tether’s forecast therefore leaves little room for price changes.
- WalletInvestor: WalletInvestor’s technical analysis has shown that Tether is not a particularly good long-term investment. Tether’s USDT price is estimated at USD 1.00 for one year. After five years, its value is estimated at USD 1117. This corresponds to an increase of approximately 11.19%. However, WalletInvestor advises against considering Tether as a long-term investment. They point out that Tether is a stable currency and its value is pegged to a fixed currency – the US dollar. Therefore, it serves more as a hedge against losses in other cryptocurrencies and is not a true investment in itself.
- Uslifed: This price prediction for Tether says its price could rise to $1.75. Over the next year, the price increase is expected to continue and in 2020. Tether will reach new highs between $1.97 and $2.05. By 2025, investors can expect a price between 3.78 and around 4 dollars per USDT.