Top 5 most popular
Tether
7% of MoneyMade members invest in Tether
Tether Returns vs S&P
0.00%
Versus S&P
•
an hour ago
0.00%
Versus S&P
•
an hour ago
6m High
6m Low
Tether
$1.00
$1.00
S&P 500
5,254.35
4,117.37
Tether
S&P 500
Does not follow the stock market
Sources: SPX, USDT
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In the Market
Buy individual shares of Coinbase (COIN), the largest exchange for Bitcoin and other altcoins (including Tether). Coinbase went public back in April 2021.
Highlights
Good For
Passive income
Time Horizon
3 months - 10+ years
Diversification
Created in 2014, Tether (USDT) was one of the first stablecoins. Stablecoins are cryptocurrencies whose value is pegged to that of an external asset, such as a fiat currency like USD or a commodity like gold. Tether is pegged to the USD at a 1:1 rate, meaning that one USDT is generally worth $1.00 USD. People often use stablecoins like Tether because they inhabit a middle-ground between fiat currency and cryptocurrency by offering the anonymity and efficiency of cryptocurrency without the volatility. What's more, investors can stake their USDT or lend it out on crypto lending platforms and earn generous rewards in the form of interest rates that are far higher than what you'd get from holding USD in a savings account. Many major exchanges offer upwards of a 10% APY for depositing USDT, and some smaller DeFi platforms offer nearly 25%.
Did you Know
As of February 2022, Tether is the third-largest cryptocurrency by market cap behind Bitcoin and Ethereum. Its market cap is currently at $77 billion and climbing.
Binance Coin (BNB) and USD Coin (USDC) are Tether's biggest stablecoin competitors, with a market cap currently sitting around $65 billion and $50 billion, respectively.
Most people who buy Tether aren't doing it as an investment. They're often buying USDT to use it to purchase other cryptocurrencies or to transfer money without having to pay exorbitant fees and go through a centralized financial institution.
Considerations
Pegged to the USD, so it's a stable store of value
The biggest stablecoin and one of the top 5 largest cryptocurrencies by market capitalization
Earn high interest rates by staking or lending your Tether
Reasons to Invest
Not backed 1:1 by reserves of USD
Company behind it has been involved in multiple lawsuits
If Tether collapses, coin holders could lose everything
Drawbacks
How You’re Taxed
Income tax
Capital Gains
Cryptocurrency is taxed as an asset, so if you hold for longer than one year, you'll owe long term capital gains taxes (of 0% to 20%) when you cash out your coins on any increase in value your coins experience. Because Tether is a stablecoin, that likely won't be much. However, if you're staking or lending your Tether, you will owe taxes on the interest you earn. That interest is taxed as regular income.