Tether has been having a difficult time for the past few days leaving experts and investors discouraged. Many cryptocurrency experts have aired their opinions regarding the future of Tether. One cryptocurrency analyst, Alex Krüger, during an interview with CCN, said that Tether is falling but will likely not crash completely short-term. However, he said that Tether may be taken over by newer stablecoins soon. He said that there are going to be regulated, licensed and new audited stablecoins that will offer the market more stability than Tether. This will, in turn, help the market grow and strengthen the cryptocurrency infrastructure.
Why The Market Needs New Stablecoins
Some months ago, the Changpeng Zhao the CEO of Binance said that Tether is going to face some competition that may steal its position as the dominant USD backed stablecoin in the industry. In fact, he specifically said that some new competitors will emerge namely Circle (the Goldman Sachs and Gemini back coin), TrustToken (supported by Andreessen Horowitz), GUSD, PAX, TUSD AND UADC jointly released by Paxos. All these tokens are regulated stablecoins based on the Ethereum blockchain.
Tether (USDT) Price Today – USDT / USD
Amid controversy, Tether hasn’t negatively influenced the industry. Well, at least not yet. There has been a lack of clarity regarding bank deposits and lack of regular audits that have increased speculation about the legitimacy and viability of Tether. Within the last month, the price has fallen by 1% from $1.0 to $0.99. Since Tether is a stablecoin, this is rather troubling. Some investors believe that it will get worse short-term. It may also have a serious impact on major cryptocurrencies.
During the interview with CCN, Krüger said that the instability of Tether will not have a significant impact on the price of other major cryptocurrencies in the market. In his words:
“Circle and Gemini have the authority to issues stablecoins. So, they are considered more trustworthy than other exchanges because there is lower credit risk attached to trading with them. The percentage of Tether will mostly migrate to Gemini (GUSD) AND Circle (USDC).”
According to him, one of the important elements of the new stablecoins is that anyone that is redeemed for the USD gets destroyed. Tether, on the other hand, doesn’t get destroyed, it is simply removed from circulation making it impossible to predict if the issuers will bring them back into circulation later.
“The fact that funds are now being moved to BTC has helped the cryptocurrency. However, these funds are only temporarily being stored in BTC. They will eventually be moved to USDC and GUSD. The only way it would be permanent is if there is a positive feedback in the industry.”
Irrespective of this, Krüger said that he doesn’t believe this will cause a crash in the value of Tether. He continued:
“I don’t think Tether is going to crash but there is the possibility that it will happen as there always is. It simply means too much of something can be bad even when a little is good. To illustrate, a person can drink two glasses of water and feel refreshed but if that same person is forced to drink 15 glasses, this might be a problem.”