Can USDT Price Forecasts Be Trusted?

Stablecoin has become the answer to the volatility and unpredictability of the crypto market. Projects with no practical use are gradually leaving the market. Stablecoins are taking their place. Demand for stablecoins is steadily increasing, primarily from institutional investors and traders. It is convenient for exchanges to settle in currencies other than US dollars, as it does not attract unnecessary regulatory attention. It also helps to work with banks that refuse to cooperate with cryptocurrency companies. USDT has earned the distinction of being the most trusted and reliable coin. Even amongst Stablecoins they choose USDT over USDC, swap BUSD to USDT etc. By using Tether, exchanges can reduce risk, speed up transactions and save on fees.

Stablecoins differ from one another in the way in which their value is pegged to the dollar:

• Traditional stablecoins with fiat reserves. These include the largest tokens: 
  Tether (USDT), USD Coin (USDC), Binance USD (BUSD). Here, there is always some entity that must keep enough safe dollar reserves in the bank to exchange all of the issued coins for real crisp dollars in case of an emergency.

• Stablecoins with cryptocurrency reserves, such as DAI. Here, other cryptocurrencies act as collateral instead of offchain reserves (existing in the real financial system). Because the dollar price of crypto tends to be highly volatile, this type of stablecoin typically uses overcollateralization: for each $1 token issued, a collateral is conditionally frozen in crypto with a current value of $1.5 or more.

• Algorithmic stackable tokens like Terra (UST), in which a clever mechanism automatically issues/redeems special tokens depending on the supply/demand balance.

How USDT functions

It is electronic money, whose value is always linked to the US dollar exchange rate. The project started back in 2014. The main idea was to produce a stable cryptocurrency that could be used as a so-called e-dollar “stablecoin”. Tether coins (USDT) are issued by Tether Limited.

As digital currency is volatile in itself, most depositors often need a stable instrument. According to most experts, volatility creates an obstacle for the spread of cryptocurrency as a means of payment. The largest Stablecoin pegged to the US dollar is Tether (USDT). 

What are the features of USDT

The currency has its own reserve, where the amount of resource is equal to the number of coins in circulation. This is the way to keep USDT exchange rate stable. A lot of projects on the Internet have a partnership with Tether.  Due to this, certain websites have connected the ability to pay for goods or services via USDT. This allowed them to increase their traffic and have more possibilities for development. The payment by means of Tether is much more profitable in comparison with payment by card. In the first case, the procedure is faster, and the commission is cheaper.

The company’s policy is transparent. Nothing is hidden from investors and traders – reserve balance can be viewed at any time, as well as the list of performed transactions. USDT makes purchasing other cryptocurrencies for fiat money much easier. 

What are the pros and cons of USDT

Pros: 

• Fast transactions;
• the ability to use various digital wallets;
• small commissions;
• low volatility;
• provision of the world’s most popular currency;
• transparent settlements. All settlement data is regularly updated and freely accessible;
• good protection against fraudsters.

Cons:

• Anonymity is present, but it is still incomplete.
• There are certain risks concerning the dollar collateral. 

USDT forecasts

USDT forecasts for the coming years are naturally positive. Analysts are predicting stable growth of the coin. The value of USDT may increase by +5%. But most forecasts are generated by bots and robots. You should always analyze the market, opportunities and forecasts personally. You can refer to the forecasts of analysts and experts, but never rely on them 100%. 

Some people make their forecasts by turning to ChatGPT. It is very unprofessional and incorrect. So far traders use AI only as an additional tool in their work. Analysis efficiency and decision-making effectiveness of artificial intelligence in trading-related matters is inferior to classic “manual” trading.  In the highly volatile cryptocurrency market, trading conditions can change at an enviable rate. There is no way to predict what news will be released. The crypto market is under pressure from the traditional financial system, of which it has become a part. The problems of the latter are often reflected in the behavior of cryptocurrencies. However, it is not easy to analyze the intricacies of the relationship between the crypto industry and the traditional financial market. Artificial intelligence should definitely not be left with this task.

Why do USDT forecasts come true?

The answer is simple: if a thousand experts make a thousand predictions, there is a good chance that one of them will be right. This is called systematic survivor error. Think about how many predictions you have heard and read about the rise and fall of bitcoin? There is at least one news item in the press every day that so-and-so’s expert predicted so-and-so’s rate. When one of these predictions comes true, it is presented as: “The expert predicted”. The truth is, “One of a thousand experts predicted today’s rate”. 

Conclusion

The crypto market is very tricky. It is a very hard thing to guess and analyze. It is important to be responsible in making decisions. Not all predictions need to be believed, but that does not mean they are all fake. If you are already an experienced person, you will know exactly what the future holds for Stablecoin or any other cryptocurrency. Invest wisely. Only listen to trusted sources. Don’t believe predictions that give exact numbers. And don’t consult an AI in financial matters.