The crypto market has been in a chaotic state and Tether (USDT), trading volume for Q1 2022 fell by 5% compared with the previous quarter. Tether transactions for the first quarter 2022 total 26,454.
The bearish trend in investors has led to many turning towards stablecoins. However, USDT investors are still interested.
Tether can be described as a stable crypto, because it’s pegged with USD. Tether has a steady value and is not subject to fluctuations like Bitcoin. It’s a go-to or preferred altcoin especially for investors who have a low risk appetite.
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What’s the Meaning of Tether?
Tether is a stablecoin which is far more consistent or stable compared to other cryptocurrencies like the two popular BTC and ETH because it’s backed by fiat money. Tether is backed by fiat money, which means it has real US dollars as collateral. This means that it has the exact same value as USD.
Stablecoins are a way to provide liquidity when crypto is in volatile, risky environments. They allow crypto to be considered as both a store-of-value and less risky venture.
On the weekend chart, USDT's total market value was $82.28Billion| Source: TradingView.com
Tether and USD Coin are three of the most widely used stablecoins. All share similar features as US dollars. However, some stablecoins can be backed with silver, gold or other fiat currencies, such as the yen, euro, and yen.
USDT Trading Volume Plummets
Tether’s trading volume went down in the first quarter at $5.3 trillion. The trading volume for the first quarter of 2019 was $5.3 trillion, which is roughly 46% less than that of 2021’s January-March 2021.
The crypto trading volume seems to be declining which may have also triggered the drop in Tether volume during Q1.
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Analysis of Price Action
It is crucial to examine the effect of Tether transactions decreasing on Tether trading volumes by comparing the USDT trading volumes in quarters 1 and 2 of 2021 to 2022.
January 2021 USDT trading volume is at $3.4 trillion which is higher compared to this year’s Q1 trading volume that registered at $1.8 trillion.
In March 2021, USDT traded volume stood at $2.7 trillion. This is quite a difference from the February 2022 volume of 1.9 trillion.
USDT trades at $1 starting January 1, 2022. It closed its quarter 1 at $1. Tether is as stable and solid as you can find. Literally.
Featured image taken from Shutterstock. Chart by TradingView.com