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Crypto Blog: Coinberry

How To Buy Tether (USDT) in Canada

Tether is among the largest cryptocurrencies in terms of market capitalization (around 85 billion dollars as of this writing). Often, it’s just behind Bitcoin and Ethereum, the biggest giants in the crypto market. With this market capitalization and popularity, Tether might be a good investment.

Buying Tether (USDT) in Canada

If you think Tether (USDT) is a good investment, you can easily buy some of it through a major cryptocurrency trading platform. In general, here’s how to do it:

  1. Signing up to the platform
  2. Adding funds through wire transfer or Interac e-Transfer
  3. Buying some Tether (USDT)

Many investors choose Tether (USDT) when they’re starting their crypto investing journey (other popular choices are Bitcoin, Ethereum, and Cardano). Also, they choose a user-friendly platform so that crypto investing will be a lot easier.

Although you can start your crypto investing right away even without acquiring technical knowledge, it still helps to learn a bit about what Tether is, how it works, what its competitors are, and why still choose Tether despite the several alternatives in the market.

What is Tether (USDT)?

First, Tether (USDT) is a cryptocurrency pegged to the US dollar. In other words, 1 USDT is always equal to 1 US dollar.

Because of its stable value and being pegged to a traditional currency, Tether is called a stablecoin. Stablecoins have their market value pegged to external references. As a result, its value remains stable. With this stability, stablecoins have become useful as a medium of exchange. This is in contrast with most other cryptocurrencies because their values are highly volatile.

Stability is critical in currencies. For example, if rent today is 2,000 CAD, tomorrow we still want it to be 2,000 CAD. But if we’re using a cryptocurrency such as Bitcoin, that value might increase 10% or more tomorrow. The value is unpredictable and this is not good for doing everyday real-world transactions.

At Tether, its value has remained almost stable (always a 1 is to 1 ratio with the US dollar). As a result, it has become useful as a medium of exchange. This has allowed many people to participate in blockchain without exposing themselves to too much risk. In other words, people can enjoy the best of both worlds where they can take advantage of the blockchain network while sparing themselves from crypto’s high volatility.

Every Tether token is fully backed by the network’s reserves including traditional currency and cash equivalents (may also include other assets). In addition, for transparency they publish a daily record of their current total assets and reserves.

Tether competitors

Tether (USDT) is just one of the many stablecoins in the market. Other stablecoins are:

As with Tether, these stablecoins are stable assets (compared to most other cryptocurrencies that are highly volatile). As a result, they have become a suitable store of value. This suitability encourages people and institutions to use stablecoins in everyday transactions (including adoption in loan and credit markets). This also encourages and improves the mobility of crypto assets throughout the crypto ecosystem.

Why choose Tether (USDT)

Some reasons are:

  • With largest market capitalization among stablecoins
  • 100% backed by Tether’s reserves
  • Multiple blockchains support (traditional currency and cash equivalents)
  • Unparalleled liquidity (most traded tokens in terms of daily volume)
  • Widespread adoption (e.g. payment services, decentralized finance protocols, digital wallet apps)
  • Tether maintains world-class measures for anti-money laundering and Know Your Customer (KYC) laws and regulations

Because Tether is one of the most popular cryptocurrencies (with market capitalization of billions of dollars), many investors feel safe or confident about putting their money in Tether. This is similar to why they’re confident with investing in Bitcoin or Ethereum because these are the most popular cryptocurrencies. It’s like investing in blue chip stocks (well-established and financially sound companies).

However, investing in Tether also has risks. Again, even highly popular and well-established cryptocurrencies are subject to uncertainty. Nothing is absolutely certain about the crypto market (and in stock investing and the general economy as a whole). You still have to be aware of the risks about investing in Tether (even if it’s a stablecoin) and in other cryptocurrencies. This way, you can minimize your losses while still exposing yourself to the potential opportunities in the crypto market.

How to keep your crypto investment safe?

First, let’s briefly talk about the risks, some of which are:

  • Hacks and scams (e.g. phishing, wrong app or website)
  • “Rug pull” (developers suddenly abandon the project and they run away with the investors’ funds)
  • Crypto market is still evolving and far from maturity
  • Government regulation and increasing scrutiny

For example, as Tether and other stablecoins increase their role in payment and financial transactions, they’re also now getting into more and deeper scrutiny from government agencies. Also, people have now become aware of the recent controversies about whether stablecoins are fully backed by traditional assets (as well as what happened to TerraUSD). It’s good to be aware of those controversies so you can make a better informed decision.

The entire crypto market is also far from maturity, which makes the prices wildly fluctuating and unpredictable. Although Tether is a stablecoin, it can still be affected by the public’s general outlook towards the entire crypto market.

Also beware of “rug pull” where developers suddenly abandon the project. This makes the cryptocurrency rapidly lose its value (and investors lose most of their funds as well). This might happen in emerging cryptocurrencies where there’s a lot of hype and then suddenly most major investors and developers pull out their money (the classic pump and dump scheme).

Lastly, there are the hacks and scams. These are classic strategies applied to the new world of crypto. For example, criminals might get access to your account and funds through phishing (you click a link and put your login in the wrong website, hackers can use that to get your funds). You can easily avoid this by ensuring the website or app you use is always correct.

Despite those risks, many people still start their crypto investing journey and put some of their money in Tether (USDT). They’re already aware of the risks and they’re doing all the reasonable measures to protect themselves (e.g. securing their account in crypto trading, verifying all transactions, researching more about a cryptocurrency before investing).

If you want to start your crypto investing journey, an easy way to do that is through Coinberry. If you’re a bit new to crypto and you want to learn more about the cryptocurrencies available, you can visit this page of crypto list and explore your different options.