Tether (USDT) Allegedly NOT Backed by USD
Tether, trading as USDT, is a cryptocurrency whose sole purpose is to reflect the price of a dollar so investors are able to save their investment from falling further if one believes that a serious market correction will occur in the near future. Unfortunately, the situation that the global market is currently facing involves serious doubt and skepticism which is causing the market cap of the coin to skyrocket. While many may believe that this is a position about which to not worry as the owner of their coins are allowed to cash out at any time, the functionality of the coin may possibly be all too convenient to be true.
With a total market cap of over $2B, Tether is trending toward pariah as many cryptocurrency investors believe that she is no longer backed by the trading platforms that host the coin. If every user were to pull their coin out at the same time, many believe that the currency exchanges would be unable to back all the money at the same time. This is particularly concerning as if USDT is not backed by the 1:1 ratio that they are claiming to hold, every currency pair with the coin now becomes inflated, but more importantly, artificially misleading. This false sense of value will immediately send the market tumbling as investments will not only leave multiple altcoins in the dust, but capital will begin leaving the market in droves. A situation as catastrophic as this could leave the cryptocurrency trading market significantly damaged for a considerable amount of time.
The company behind the coin, Tether Limited, announced that they have severed ties with Friedman LLP who were responsible for auditing their reserves and ensuring that the cryptocurrency was indeed backed by $1 per coin. If the reason for the rapport to end so abruptly points towards anything of that similar to a cover-up or in an attempt to hide something from the auditors, there is strong confidence that the market will be exposed to a mass exodus of capital. However, there is still no true indication that Tether Limited does not have enough financial backing to not support its clientele. If this does not turn out to be the case, this will certainly be a great time to buy if the market over corrects to another coin that is unable to fulfill how the cryptocurrency was meant to perform as collateral damage of a coin as big as USDT will affect the market as a whole in some way.
