Tether

Tether Returns vs S&P

0.00%

Versus S&P

-20.20%

an hour ago

0.00%

Versus S&P

-20.20%

an hour ago

6m High

6m Low

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Tether

$1.00

$1.00

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S&P 500

4,582.64

3,585.62

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Tether

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S&P 500

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Does not follow the stock market

Sources: SPX, USDT

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

  • poitStar

    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.

  • poitStar

    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.

  • poitStar

    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

    Reasons to Invest

  • 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

    Drawbacks

  • 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

How You’re Taxed

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How You’re Taxed

Income tax

Income tax

Capital Gains

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.

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