The cryptocurrency market has shown signs of revival, and one asset standing out in recent weeks is USDT (Tether). Over the past 35 days, USDT climbed from a low of 6.60 CNY to 6.97 CNY — a notable increase of 5.6%. At one exchange on April 8, the price even reached 7.08 CNY, reflecting a premium of 7.2%. Back in 2018, when Bitcoin hovered around $10,000, USDT hit an all-time high of 7.27 CNY. This resurgence raises important questions: Is crypto trading really losing money? Can stablecoins like USDT offer profitable opportunities?
Let’s explore how USDT functions as both a safe haven and a strategic tool in volatile markets, why it remains dominant despite controversies, and how traders are leveraging it for consistent returns.
Why USDT Matters in Crypto Trading
In the world of digital assets, USDT serves as the primary bridge between fiat and crypto. Whether you're taking profits, cutting losses, closing long positions, or entering short trades, most traders convert their holdings into USDT before cashing out. It acts as a stable pricing anchor across exchanges, enabling seamless trading pairs and accurate profit/loss measurement.
During periods of extreme volatility — such as market "crypto waterfalls" — investors rush to park funds in stablecoins. Even when the broader market drops over 15%, stablecoins like USDT, GUSD, USDC, and PAXOS typically only decline by 4–5%, indicating that most capital isn’t exiting to fiat but rather seeking shelter within the crypto ecosystem itself.
👉 Discover how traders use USDT to protect and grow capital during market swings.
This behavior highlights a crucial insight: stability within decentralization is highly valued. While not risk-free, USDT offers liquidity, speed, and relative safety compared to holding volatile assets like Bitcoin or altcoins during downturns.
The Controversies Surrounding USDT
Despite its widespread adoption, USDT has faced persistent scrutiny:
1. Allegations of Market Manipulation
Multiple analyses of Bitfinex trading data suggest that new USDT tokens are often used to purchase cryptocurrencies on the exchange, potentially inflating prices. This pattern repeats during market dips — just when confidence wanes, large volumes of USDT appear, driving buying pressure.
While unproven legally, this suspicion has fueled debates about whether USDT issuance is truly backed 1:1 by reserves or used strategically to stabilize or boost sentiment.
2. Opacity and Lack of Transparency
Tether Limited, the company behind USDT, has long been criticized for not fully disclosing audited financials or allowing independent verification of its bank reserves. Although they’ve released periodic attestations, many investors remain skeptical about the actual backing of each token.
3. Anonymity and Regulatory Risks
As a decentralized digital asset, USDT transactions don’t require identity verification, making it attractive for cross-border transfers and fast settlements — but also raising concerns about potential misuse for money laundering or sanction evasion.
Yet, despite these red flags, USDT continues to dominate.
Why USDT Remains Unshakable
Several key factors explain why no competitor has dethroned USDT:
🔹 Market Dominance and Liquidity
No other stablecoin matches USDT’s trading volume and exchange integration. It’s listed on nearly every major platform and supports thousands of trading pairs. High liquidity means minimal slippage — essential for active traders.
🔹 Resilience Across Market Cycles
Whether in bull runs or bear markets, USDT maintains utility:
- In bull markets, it often trades at a premium due to high demand.
- In bear markets, it serves as a reliable store of value within the ecosystem.
Even with regulatory uncertainty limiting direct fiat access to crypto in many regions, USDT fills the gap — acting as a de facto dollar proxy.
🔹 Network Effect and Consensus
There’s a powerful lesson in history: consensus creates value.
Recall China’s Republican era — warlords and banks issued countless currencies, yet only one gained universal trust: the silver yuan (Yuan Da Tou). Despite political chaos, people accepted it because others did. Its wide acceptance ensured stability and usability.
Similarly, USDT thrives on collective belief. Even critics who distrust Tether still use it because everyone else does. That network effect is incredibly hard to replicate.
👉 See how consensus-driven assets shape modern digital economies.
Can You Profit from USDT?
Many investors now treat trading USDT itself as a low-risk strategy, akin to fixed-income investing. Here’s why:
✅ Limited Competition
No token currently challenges USDT’s dominance. Alternatives like USDC or DAI lack the same global reach and liquidity in emerging markets.
✅ Regulatory Arbitrage
Due to restrictions on direct crypto-fiat gateways in countries like China or Vietnam, traders rely on over-the-counter (OTC) desks where USDT frequently trades at a premium — sometimes up to 7–10% above USD parity.
By buying low and selling high during these spikes, traders earn consistent spreads without exposure to volatile crypto price swings.
✅ Safe Haven Premiums
During market crashes or geopolitical tensions, demand for USDT surges. Traders who anticipate these movements can position early and profit from temporary imbalances between supply and demand.
Frequently Asked Questions (FAQ)
Q: Is USDT really backed 1:1 by USD?
A: Tether claims full backing through cash, cash equivalents, and other assets. However, full real-time transparency is lacking. While audits have improved, some skepticism remains among regulators and analysts.
Q: Can I lose money holding USDT?
A: Yes — if Tether suffers a loss of confidence (e.g., reserve shortfall or regulatory crackdown), its peg could break. Though rare, de-pegging events have occurred briefly in the past.
Q: Why does USDT sometimes trade above 7 CNY?
A: In markets with restricted USD inflows (like China), demand for dollar-linked assets drives premiums. Exchange rates and capital controls influence local pricing.
Q: Are there safer alternatives to USDT?
A: USDC and GUSD offer greater transparency and U.S. regulatory compliance but have lower liquidity outside Western markets. For global traders, USDT remains more practical despite risks.
Q: How do I buy USDT at the best rate?
A: Compare OTC desks, P2P platforms, and exchange rates across regions. Timing matters — premiums often rise during market stress or regulatory announcements.
👉 Access real-time USDT trading pairs with deep liquidity and tight spreads.
Final Thoughts: Risk vs. Reality
Crypto trading inherently carries risk — but so does keeping money idle. While many focus on moonshot altcoins or Bitcoin cycles, smart traders know that stability can be profitable too.
USDT may carry controversy, but its resilience speaks volumes. It's not just a stablecoin — it's a symbol of trust built through usage, necessity, and consensus.
Whether you're hedging against volatility or capitalizing on regional pricing differences, understanding USDT’s role is essential for any serious participant in the crypto economy.
As long as global financial access remains uneven and trust in institutions fluctuates, assets like USDT will continue to thrive — not because they’re perfect, but because they work well enough for millions.
Remember: Investment involves risk. Always conduct your own research and never invest more than you can afford to lose. This article does not constitute financial advice.
Core Keywords: USDT, stablecoin, crypto trading, Tether, market volatility, digital currency, blockchain, trading strategy