USDT: The true 'stabilizing force' in the crypto world, is it really stable?

What if I told you—
a company with fewer than 150 employees,
with an annual profit of nearly 20 billion dollars,
but controlling the 'blood circulation' of the entire cryptocurrency world,
would you think that’s exaggerated?

But this is not a story, it’s reality.
This company is Tether,
and the stablecoin it issues is called USDT (Tether).

🚩Why was USDT created?

Not to get rich, but to avoid 'flipping over'
Before 2014,
Bitcoin was the 'universal currency' of the entire crypto world.

At that time, you wanted to buy any kind of coin:
👉 First, deposit US dollars into the exchange
👉 Exchange for Bitcoin
👉 Then use Bitcoin to buy the target coin

Sounds reasonable, but there is a fatal problem 👇
The price of Bitcoin is too volatile.

At the moment you place the order, it's $30,000,
if the server delays,
the transaction might already be $29,500,
or $30,300.

📉📈
Price volatility + system delay = trading uncertainty
For traders, it's like changing a tire in a storm.

Thus, a demand has emerged:
Is there something,
as stable as the US dollar,
but can circulate freely on the blockchain?

USDT emerged in this context.

🚩The essence of USDT:
It is not 'crypto dollars', but 'digital checks'

The rules of Tether are very simple:
1 US dollar = 1 USDT
1 USDT = can be redeemed for 1 US dollar

Official promise: backed by equivalent assets
What can you imagine USDT as?

👉 Not cash
👉 More like a:
'US dollar check that can be cashed anytime'

And the biggest use of this check is only one:
To ensure that crypto trading is no longer disturbed by price fluctuations.

🚩Why didn’t anyone trust USDT early on?

Because it goes against the core beliefs of the crypto community.
What was the most important value in the crypto community at that time?
👉 Decentralization

Bitcoin: no one can print more at will
Ethereum: rules are written in code

But what about USDT?

❌ Completely centralized
❌ Issued solely by Tether
❌ Whether you can redeem it for dollars depends on its credibility

In 2015, only one exchange in the entire industry was willing to support USDT.
Most people felt:

'Isn’t this just a digital note issued by a private company?'

🚩Controversy continued, but USDT was used more and more

The turning point was its 'usability'.

As USDT was supported by more exchanges,
it began to become the universal intermediary currency in the crypto space.

Now you see the situation at mainstream exchanges like Binance, OKX, Bybit:
Over 80% of trading pairs are priced in USDT

Investors can in seconds:
BTC → USDT → ETH

Without touching fiat currency at all
🧠
USDT = the 'safe haven' of the crypto world

During the Bitcoin crash in 2022,
USDT's daily net inflow once exceeded $5 billion.

What does this indicate?
👉 The market may not fully trust it
👉 But in times of panic, people still rush towards it

🚩So how does Tether actually make money?

Here comes the question 👇
Since USDT is redeemable 1:1 for US dollars,
and charges no transaction fees,
how does Tether earn $20 billion a year?

The answer is one word:
💥Reserves

In theory:
Users give 1 US dollar
Tether should then keep that 1 US dollar

But the reality is—
That money has been invested.

Public information shows (confirmed after multiple investigations):

Assets that can be immediately redeemed
❌ Are long-term below the total circulating USDT

Among the reserve assets:
About 24% are high-risk assets
Bitcoin accounts for over 5%
Nearly 1/4 of the assets have unclear sources

You can understand it this way 👇
USDT is like a bank,
but it takes demand deposits,
and uses them to buy stocks, cryptocurrencies, and even opaque assets.

🚩Why hasn’t USDT 'collapsed' so far?

Because it is stuck in an extremely delicate position:

1️⃣ The scale is too large
Market cap in the hundred billion dollar range,
If something goes wrong, it will trigger systemic risks.

2️⃣ The demand is too real
Numerous exchanges, arbitrageurs, and market makers around the world
Simply cannot do without USDT

3️⃣ Regulators choose to 'watch, but not overturn the table'
Fines, warnings, demands for disclosure,
but not directly banning it.

USDT is like an old bridge:
Everyone knows it’s not perfect,
but until there is an alternative,
we can only continue to use it.

🚩What is the true meaning of USDT?

USDT is not an 'idealistic crypto product'.
It is more like:
A compromise product of traditional finance × the crypto world

Its existence indicates one thing 👇
🚨
No matter how decentralized cryptocurrencies become,
they still cannot avoid 'stability' and 'regulation'.

The future of USDT depends not only on Tether,
but also on:
Global stablecoin regulation
Digital dollars, USDC and other competitors
Whether the market can still tolerate 'incomplete transparency'

⚠USDT is not perfect.
But it exists in reality, is really used,
and truly impacts the entire crypto market as a core asset.

Understanding USDT,
you understand half of the crypto world.

If you still want to know more:
Will stablecoins become the center of the next regulatory storm?
The differences between USDT, USDC, and future digital dollars?
How should ordinary people rationally view the risks of stablecoins?

💖Welcome to continue following Web3 Captain.
#BTC #USDT