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Is Tether a real safety net for the crytocurrency world? by johanalejo

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· @johanalejo ·
$206.11
Is Tether a real safety net for the crytocurrency world?
![Tether-large.jpg](https://steemitimages.com/DQmQUbw352fbefff3JxaB3CgG9eRWQdQKSNCYwg6ZiKqyKR/Tether-large.jpg)

Today I just wanted to finish what I started yesterday. I would like to talk about how Tether (USDT) is perceived. What people think it is and what I think is useful to.

So as (almost) everyone of you know by now, USDT is an USD backed crytocurrency available in some of the biggest exchanges in the world to serve as a surrogate for the actual United States of America's issued currency.

It gives this exchanges the possibility to offer it's users the chance to trade their crypto for "real money" without the legal obligations that this would bring to them.

For some people, this gives them the confidence they need to invest their hard earned money into cryptocurrencies in one of these exchanges. They feel that in case of a strong pullback or even a crash, USDT offers them the opportunity to keep their money safe while the prices recover.

And this is truth... in a way.

Let's take as an example the current situation. In the last month and a half we've seen a strong pullback in value of most of the cryptocurrencies currently being traded in the market. Bitcoin, most notably of all.

In this situation, anyone that sold their BTC (or any other coin wich price went down this month) for USDT at a higher price than it is today and decides to buy again, will earn some BTC to their portfolio. This wolud earn them even bigger gains once the BTC price recovers to it's original value.

So we have to say that in this particular situation, USDT works pretty fine for what it's supposed to be good for. A value refuge in a volatility environment. Negative volatility that is. Someone could lose money if he/she goes in and out of USDT at the wrong time. But that's not a problem, just part of the known risks of trading.

But what would happen if instead of pullback (as big as this can be) we have a crash? A real crash. A Bitconnect kind of crash.

I know, this seems unlikely and far fetched to me as I am sure that it seems to you. If we weren't confindent in the future of cryptocurrencies we wouldn't be writing and reading each other in this platform, but the truth is we've had crashes in the past so we know that it could happen again.

And USDT is supposed to be a way of keepeing our investments safe on that situation. But it is not. And that's OK.

In case of a real crash, a huge amount of investors would seek to sell their "not USD backed" crypto for USDT. All at the same time. This, even when USDT value is supposed to be pegged to a 1 USD value, would bring USDT value up causing people who fled out of other crypto into USDT to actually lose money while doing it. Then all of these people would sell their USDT, all at the same time, bringing it's value down again and making them lose money. Again.

So, why if USDT can't save our savings and investments in case of a crash people seem to think otherwise? I know, you are going to tell me that this isn't truth. But why then was the market hitted so hard by the news of US regulators investigating Tether and Bitfinex?

In conclusion, Tether is useful. Tether can't save your money from a crash. And it doesn't matter

Invest in crypto only if you're confident on it. On it's technology and it's future. And of course, invest only what you can afford to lose.

Share your thoughts
👍  , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , and 156 others
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@adriatik ·
re-johanalejo-is-tether-a-real-safety-net-for-the-crytocurrency-world-20180201t064616863z
You got upvoted from @adriatik bot! Thank you to you for using our service. We really hope this will hope to promote your quality content!
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@aksdwi ·
<p>This post has received a 13.23 % upvote from @aksdwi thanks to: @johanalejo.</p>
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@allaz ·
re-johanalejo-is-tether-a-real-safety-net-for-the-crytocurrency-world-20180201t053931487z
You got a 15.60% upvote from @allaz courtesy of @johanalejo!
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@andyjim ·
@johanalejo -I step away from Tether as I never see any proof record of Financial Audit Report or USD backed up fund as it claimed. And I am adding Bitfinex on my blacklist as well.

Thanks for sharing  your on Community. :-)
👍  
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vote details (1)
@bearwards ·
re-johanalejo-is-tether-a-real-safety-net-for-the-crytocurrency-world-20180201t052018690z
You got a 25.00% upvote from @bearwards courtesy of @johanalejo!
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@bitgeek ·
comment
Congratulations @johanalejo, this post is the  most rewarded post (based on pending payouts) in the last 12 hours written by a Newbie account holder (accounts that hold between 0.01 and 0.1 Mega Vests). The total number of posts by newbie account holders during this period was 4122 and the total pending payments to posts in this category was $5615.48. To see the full list of highest paid posts across all accounts categories, [click here](www.steemit.com/steemit/@bitgeek/payout-stats-report-for-1st-february-2018--part-ii). 

If you do not wish to receive these messages in future, please reply stop to this comment.
👍  
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@boomerang ·
This post has received a 9.62 % upvote from @boomerang thanks to: @johanalejo
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@booster007 ·
$0.55
Your post was resteem by Whale ResteemService @booster007 & @boostupvote
Resteem over 9000+ followers 

Keep it up!
All the best!

https://s14.postimg.org/uq1man9nl/Bildschirmfoto_2016-09-30_um_01.14.08.png

First Follow for 3 hours | Send a minimum transaction 0.100 steem/SBD with post URL in memo | Your post gets resteemed | A post can only be resteemed once!
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vote details (6)
@bycoleman ·
Top notch analysis of tether in a crisis.  It's a great token if you are ahead of the crowd, but nearly worthless if you want to save yourself once the trend is fully discovered (by nearly everyone) and tether cannot keep its peg.

As far as long term -- If you are worried about exchanges (you should be) hold your coins in a local wallet or cold storage.  Use the exchanges for exchanging.

Etherdelta and other decentralized exchanges are of much benefit for more peaceful sleep as well.

Craig
👍  
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@bycoleman ·
BTW: I resteemed this post.
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@captboatface ·
![20180131_102118.jpg](https://steemitimages.com/DQmeRDA8hZvpVX2zfG57eqgMqKiF2vzHbX9G6VVP7gfRHT2/20180131_102118.jpg)

Tether is a joke!  Its only slightly backed less than the usd which is backed by a big powerful group of people. 
Uk has it right with a gold backed crypto.  Check my blog for the news.
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@j3dy ·
they can buy golos es :D golos is also backed by gold I think 
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@cflclosers ·
I agree with you on USDT.  I think it is the rumor, scandal and panic that in the media that shake things up and its a real shame.
👍  ,
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vote details (2)
@ebargains ·
$0.90
There is a tremendous opportunity for central banks in every country to create their own electronic currencies with their own set of KYC/AML parameters, and letting that currency be used on the local crypto exchanges within the country or in countries with which they have agreements with. 

This would avoid any possible future issues with non-governmental pegged cryptocurrencies.
👍  , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
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vote details (32)
@johanalejo ·
I can't put too much trust on governments. But anyway, I think you're right and when we have some central banks putting out their own (more stable) currencies, that could propel a new rise in the market because of people more confident in investing and having a way out in case of a pullback
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@shanto24 · (edited)
You are Right..👌

I like this.. your comment..carry on dear @ebargains
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@hellowhale ·
This wonderful post has received a @johanalejo 12.21% upvote from @hellowhale. Discord Channel: https://discord.gg/WVJW7AC  Please vote with the link below if you support our project. https://goo.gl/1zYDKh
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@jerrybanfield ·
re-johanalejo-is-tether-a-real-safety-net-for-the-crytocurrency-world-20180201t072340664z
Thank you johanalejo for making a transfer to me for an upvote of 30.38% on this post! 

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@jhoni ·
thank you for this very useful lesson and information hopefully you are always healthy @ johanalejo
👍  
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vote details (1)
@jkenny ·
$2.31
Its nice to have a stable coin to jump in and out of during these up and down cycles .
👍  ,
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@johanalejo ·
It has been an useful tool this last month. I haven't used it because I rather just hold those coins I'm confident, but many people actually gained some BTC (ETH, LTC, etc) buying and selling USDT
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@reddutopia ·
It is, but like @Johanalejo explained, the entire logic of the crypto market kind of renders this "stable" state of a coin useless when the average user uses it that way. You'd need a variety of "stable" coins, that wouldn't really increase like others.. I think...
👍  
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@levitation ·
<p>This post has received a 20.13 % upvote, thanks to: @johanalejo.</p>
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@mansyurni ·
Postingan yg bermanfaat@johanalejo
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@masterroshi ·
its sad to say but if we really want a refuge crypto then we need one backed by a government. picture a crypto us dollar where the new dollars can be mined by citizens and the old one can be traded in. they could also be burned when used to maintain stable value. it is inevitable for governments to get into crypto and once their fiat systems can be blockchained they will convert. i think that coupled with atomic swaps will be the future of crypto.
👍  ,
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@johanalejo ·
Agree. I don't think I would use it unless it becomes the everyday use currency, but the inclusion of those government backed coins will boost up trust in the system
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@mathemandy ·
Hi @johnalejo,  I might be probably not as experience as you in this crypto business,  but from what I've heard Tether is a good place to save your cryotocurrency in case of  a crash.  It's really nice you explained it well enough in the post.  recently a friend told me to put my coins there,  but I didn't really grab why,  
But now I do
👍  
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@johanalejo ·
I'm not experienced at all man. I've been doing this for like three months and a half. I'm just curious and read everything I can find about crypto
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@minnowhelper ·
re-johanalejo-is-tether-a-real-safety-net-for-the-crytocurrency-world-20180201t060653563z
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@mnemonic19 ·
$0.04
Tether was sketchy from the start. One alternative might be gold backed cryptos, like Xaurum or the soon to be project of the Perth Mint.
👍  , ,
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vote details (3)
@johanalejo ·
I don't think that the problem in this case is what do you use to back its value. For example, the venezuelan government will issue an oil backed crypto. I think that it's a matter of trust in who is behind it
👍  
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@mnemonic19 ·
Yes that is absolutely true. Gold is just one example of a trusted commodity. There can be many others.
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@morwhale ·
<p>This post has received a 6.68 % upvote from @morwhale thanks to: @johanalejo.</p>
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@mrswhale ·
This wonderful post has received a @johanalejo 23.8% upvote from @mrswhale. Discord Channel: https://discord.gg/WVJW7AC  Please vote with the link below if you support our project. https://goo.gl/1zYDKh
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@msp-bidbot ·
re-johanalejo-is-tether-a-real-safety-net-for-the-crytocurrency-world-20180201t054959440z
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@nzfxtrader ·
$0.05
I read that there are real worries that the price of Bitcoin is being propped up by  #Bitfinex and #Tether
👍  ,
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vote details (2)
@philakonecrypto ·
Just started following you. Great post. Community, please consider my blog. I currently have 70,000+ 
followers on Youtube, Twitter, and here combined where my goal is to help improve the crypto community.
I provide free TA on request, make high accuracy calls, and focus on improving YOUR trading game in a concise and educational manner.
https://steemit.com/bitcoin/@philakonecrypto/bitcoin-btc-feb-1-in-depth-fundamental-and-technical-analysis
![](https://steemitimages.com/DQmXuhtCiaa97fEk8YUU5YjdMQayAkeMRZ5qFgcKdfLJBwm/image.png)
👍  , , ,
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vote details (4)
@postpromoter ·
re-johanalejo-is-tether-a-real-safety-net-for-the-crytocurrency-world-20180201t070120261z
You got a 3.96% upvote from @postpromoter courtesy of @johanalejo!

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@pushup ·
re-johanalejo-is-tether-a-real-safety-net-for-the-crytocurrency-world-20180201t071827332z
21.97% @pushup from @johanalejo
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@redlambo ·
re-johanalejo-is-tether-a-real-safety-net-for-the-crytocurrency-world-20180201t045445892z
You got a 6.09% upvote from @redlambo courtesy of @johanalejo!
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@resteem.bot ·
<a href="https://steemit.com/steemit/@resteem.bot/7yazyw-steemit-resteem-bot-faq"><img src="https://steemitimages.com/DQmXsep2sgiCyx1y8oB5XoSy8PgXB8spZyaa6rkJbmERxHj/resteembot.jpg" alt="@resteem.bot" /></a>
Resteemed to over <b>10700 followers</b> and <b>100% upvoted</b>. Thank you for using my service!

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@resteem.bot
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@resteemr ·
This post was upvoted and resteemed by @resteemr!
Thank you for using @resteemr.

---

@resteemr is a low price resteem service.
Check what @resteemr can do for you. [Introduction of resteemr](https://steemit.com/steemit/@resteemr/important-announcement-about-resteem-and-upvote-service).
properties (22)
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@rondras ·
Tether has the risk of being a scam - than it might be worth zero. I do not know if it is , but given that there is hardly any upside, I would never touch it...
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@samuel-swinton ·
I agree with what you said about Tether. My concern is that we have to trust Tether and its bank to hold the USD. Every other cryptocurrency is designed to be trustless.
👍  
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vote details (1)
@seakraken ·
re-johanalejo-is-tether-a-real-safety-net-for-the-crytocurrency-world-20180201t071304270z
Release the Kraken! You got a 20.91% upvote from @seakraken courtesy of @johanalejo!
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@shares ·
re-johanalejo-is-tether-a-real-safety-net-for-the-crytocurrency-world-20180201t071613437z
This post has received a 26.22% UpGoat from @shares. Send at least 0.1 SBD to @shares with a post link in the memo field.

To support our daily curation initiative, please donate 1 SBD or delegate Steem Power (SP) to @shares by clicking one fo the following links: [10 SP](https://on.king.net/10sp), [50 SP](https://on.king.net/50sp), [100 SP](https://on.king.net/100sp), [500 SP](https://on.king.net/500sp), [1000 SP](https://on.king.net/1000sp), [5000 SP](https://on.king.net/5000sp). 

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properties (22)
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@sleeplesswhale ·
<p>This post has received a 43.82 % upvote from @sleeplesswhale thanks to: @johanalejo.</p>
properties (22)
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@sneaky-ninja ·
re-johanalejo-is-tether-a-real-safety-net-for-the-crytocurrency-world-20180201t062659784z
Sneaky Ninja Attack! You have been defended with a 8.83% vote... I was summoned by @johanalejo! I have done their bidding and now I will vanish...Whoosh
properties (22)
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@srirahayu ·
a very useful post 👍😊
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@treeplanter ·
Thanks for your donation
Good job! Thanks to @johanalejo you have planted 0.50 tree to save Abongphen Highland Forest in Cameroon. Help me to plant 1,000,000 trees and share my Steem Power to the others. Selfvoting is prohibited, but that should be the reason to spread the world to protect our precious environment. Check out profile of our conservation association @kedjom-keku and the founder/coordinator @martin.mikes to get more information about our conservation program. My current SP is 18367.63. Help me to plant more trees with your delegated SP. 

Thanks a lot,
your @treeplanter 
[www.kedjom-keku.com](www.kedjom-keku.com)
properties (22)
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@upmewhale ·
re-johanalejo-is-tether-a-real-safety-net-for-the-crytocurrency-world-20180201t062006220z
You got a 13.87% upvote from @upmewhale courtesy of @johanalejo!
properties (22)
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@whatamidoing ·
It seems Maker is trying to solve a lot of the problems of Tether and become more sustainable in the long run with their second coin, the name escapes me right now
👍  
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vote details (1)
@zulkarnaini95 ·
https://steemit.com/steemit/@zulkarnaini95/sharing-friends
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