Controversial cryptocurrencies are gaining popularity among traders.
According to a new study by the US investment bank Morgan Stanley, transactions between Tether's USDT (a stable coin that is designed to trade in US$1) are increasing.
Bitcoin transactions are usually paired with the fiat currencies most frequently traded (such as U.S. dollars, Japanese yen, and euros). Of course, one can also trade between Bitcoin and other cryptocurrencies.
However, since early 2018, Morgan Stanley has discovered that transactions between USDT and Bitcoin have become more common.
The bank said: "In the recent bear market, USDT has been occupying a larger share of the trading volume.
The bank compiled data from more than 350 exchanges and estimated that 14.2% of Bitcoin transactions were matched with less than 1% of the $10 match.
USDT is intended to be used as a stable coin, which is a cryptocurrency that can avoid bitcoin fluctuations but still has cryptographic operability.
This is one of the reasons why the use of coins may increase. Since the beginning of 2018, Bitcoin has set a 70% share of the historical peak of nearly 20,000 U.S. dollars in December.
Stephen Kade, Tether's rival TrueUSD, told Business Insider: “The tethered trade has increased with Bitcoin fluctuations.
Despite this, the cryptocurrency is controversial and Tether has been circulated by the Commodity Futures Trading Commission. Skeptics question whether Tether had the dollar to back its crypto.
"They have not yet proved that they have the funds to support their tokens," said Kidder.
Despite this, the two cryptocurrency exchanges, Binance and OKEx, added cryptocurrencies to their venues at the end of 2017.
"These two exchanges do not accept the fiat currency, so when the bitcoin price falls and most other cryptocurrency prices fall, traders may turn to the tether, because its price is equivalent to the dollar and stable," Morgan Stanley said. Lee said.
Traditionally, long-term Bitcoin traders will exchange some Bitcoins for another cryptocurrency when prices are free to fall. But recently things are more relevant. Therefore, bitcoin exchange for ether does not really help reduce risk.
"In a trading environment like today, I can see USDT playing a more important role," an industry source said. "For users and potential market makers."
Many say Tether is fake or a scam. What have you heard or know about this cryptocurrency. Love to hear from you in the comments section.