Is the USDT always fixed at one dollar?

Tetra digital currency is one of the dozens of “stable coins” in the cryptocurrency market. The price of stable cryptocurrencies always depends on the value of the assets they support. There are a number of stable digital currencies on the market, backed by the US dollar, but the most prominent is the Tetra. At the time of writing, Tetra is in third place with $ 75 billion in market cap. The price of a tetra is approximately equal to 1 US dollar, but this is not always the case. Occasionally there are very few fluctuations in the market of these cryptocurrencies and its price changes to 0.98 or 1.02 US dollars. There are various reasons for this, and developers are always trying to keep the price of this stable coin in the range of $ 1. But, why is the price of Tetra always fixed at one dollar? At the end of this article, we will answer our questions.

What is StableQueen?

Before addressing any issues, it is best to get acquainted with stable coins and how they work. Stable digital currencies are a type of digital currency that does not fluctuate in price. These types of cryptocurrencies are a simple and secure way to conduct financial transactions. The stable value of coins depends on a valuable and stable asset or commodity, and the value of these coins is tied to the backing. The price of stable coins is constant over time and their purpose is to deal with the inherent fluctuations of cryptocurrencies.

If we want to enter the digital currency market, it is better to buy a stable coin like Tetra first. Keeping stable coins helps us to be largely safe from possible storms of market fluctuations.

What is Tetra Digital Currency?

The Tether digital currency, known as the USDT for short, is a fixed-price cryptocurrency that protects our capital from severe market fluctuations. Using these cryptocurrencies, we can transfer dollars digitally. Tetra is used as a tool to control price volatility in cryptocurrency transactions. Thus, this blockchain-centric digital currency benefits from both cryptocurrency features and, like Fiat currencies, has no currency cryptocurrency price fluctuations. To “Buy and sell Tetra»In a safe environment or high speed, we can turn a trust into a reputable exchange.

History of Tetra

The idea for stable coins came about when developers noticed the sharp fluctuations of digital currencies. In the past, as the cryptocurrency market declined, users who wanted to maintain the value of their assets would convert their capital into dollars, which would drive large amounts of capital out of the crypto market. It was at this time that the idea for the digital dollar came into being in 2014. Tetra (USDT) was initially launched by a person named RailQueen in 2014, but was later re-registered by iFinex, the owner of Tetra and the owner of the digital currency exchange Bit Phoenix, which he founded.

Application of Tetra

Tetra can be a good alternative to the dollar due to its price stability. Also, transactions through Tetra are very fast and cheap compared to Fiat currencies. In severe market fluctuations, such as sharp declines in the prices of bitcoin and atrium currencies, we can maintain the value of our assets by converting them to tetra. Of course, with fluctuations in the price of Fiat currencies such as the dollar, the price of Tetra also changes. In Iran, due to the existing sanctions, the value of the national currency decreases over time. Only by buying Tetra digital currency can we preserve the value of our money over time.

How is Tetra produced and why is its price always constant?

For every tetri unit produced, 1 US dollar is stored in bank reserves, which acts as the backbone of this digital currency. This means that if 600,000 USDT units are offered in the market, $ 600,000 must be kept in the bank treasury so that the price of this currency remains the same as $ 1. The supply of Tetra is not limited and new units are produced and enter the market according to the market demand.

Tetra digital currency was first distributed on the Omni layer, which is the bedrock of the bitcoin blockchain. But now it is also available on Atrium Blockchain, Bitcoin Cache, Theron and Algrand. Likewise, access to Tetra is very easy and we can save on the official wallets of Atrium, Theron and Algrand. We can trade Tetzar cryptocurrencies in reputable domestic and foreign exchange offices. To find a safe exchange, it is better to read the article «Introducing foreign exchange without sanctions»Read.

Tetzar cryptocurrencies are produced by Ifinx company and sent to Bitfinx exchange based on market needs and different time periods. They are then transferred to other exchanges by traders. It is true that Tetra transactions are decentralized, performed on a large blockchain network, and the distribution of its units is completely centralized, but we can not call it a decentralized digital currency.

Why do Tetra prices fluctuate sometimes?

This problem arises due to supply and demand in the market. When there is more demand for Tetr in the market, the value of each Tetr unit reaches over US $ 1. At this time, the company introduces a new Tetra to the market and suppresses the price. In contrast, when there is less demand for Tetra, its value drops below $ 1. In these cases, the company takes back some of the tetris in the market to increase the price.

As we said, Tetra is not a coin that can be extracted, but a token issued through the Omni protocol that stores bitcoin blockchain data. Tetra does not generally restrict the sending of these passwords to users, but the company has the ability to issue and eliminate any amount of Tetra. This capability allows the company to take action that can always maintain a “1: 1” ratio between the US dollar and Tetra.

Does the price of Tetra change during severe market fluctuations?

When market trends decline and the price of digital currencies such as bitcoin falls, large numbers of holders of these currencies start selling. These people turn their capital into a tether and wait for a good opportunity to invest. This will increase the demand for tether and as a result the price of these cryptocurrencies will increase. At this time, professional investors come to the market and use the tethers they already have to buy the currencies that have reached the price floor. By doing this, they bring Tetra into the market, which reduces the price of Tetra. Of course, investors may not enter the market due to the intense fear in the market, which will increase the price of Tetra. Therefore, the behavior of traders during the severe fluctuations of the crypto market will have a great impact on the price of Tetra.

Concluding remarks

In this article, we answered the question why the price of Tetr is always constant and realized the main nature of these codes. Tetra has a fixed value equivalent to one US dollar, and the companies behind it are always trying to keep the price of these cryptocurrencies constant. Investing in Tetra currency is recommended for people who do not want to take risks in this market and only want to maintain the value of their assets over time by buying Tetra.