Stablecoins have always been a suitable alternative for crypto investors who wanted the stability of fiat and the freedom of cryptocurrency.
These digital coins are usually tied to a fiat currency, making their values largely unchanging. So, investors can use them to easily conduct crypto transactions without fear of their value suddenly dropping. But are stablecoins a good hedge against inflation? We will find as you read further. Also, in this article, we will be introducing you to three alternatives to USDT which are – D2T, IMPT , and RIA.
The confidence of many investors was shaken in May 2022 when the value of TerraUSD (a stablecoin) and Luna, crashed. TerraUSD (or UST) is a stablecoin on the Terra blockchain, and Luna is its sister altcoin on the same blockchain. TerraUSD is an algorithmic stablecoin that isn’t backed by a fiat currency, but by an algorithm that linked it to Luna.
Nonetheless, the de-pegging of UST (and its subsequent crash) led to a fall in Bitcoin’s value and that of other cryptocurrencies. This has got many investors scared that the Tether blockchain and its USDT token can avoid this fall in value.
What is Tether?
Tether is a stablecoin that’s pegged to the United States (US) dollar. This allows this digital coin to maintain a 1:1 relationship with the US dollar. It’s also one of the largest stablecoins around, with many people seeing it as the biggest stablecoin.
The Tether network was founded in October 2014 by Brock Pierce, Reeve Collins, and Craig Sellars. The native token of this blockchain network is USDT. Since 1 USDT is pegged to one dollar, this digital coin can serve as a store of value for investors.
Apart from the Tether network, other blockchains such as Bitcoin, Ethereum, Tron, and Algorand also support USDT. This stablecoin also offers noteworthy cryptographic security and peer-to-peer trading facilities. It also offers large-scale liquidity for a stablecoin, and this makes it more stable than other stablecoins.
Will Tether (USDT) Avoid a Luna Crash?
Although USDT and UST are regarded as stablecoins, there are many differences between them. First, USDT is a fiat-backed stablecoin, while UST is an algorithmic stablecoin. Unlike fiat-backed coins, algorithmic coins work with an incentive or maths to maintain their peg.
Since UST was matched to Luna using an algorithm, the amount of UST is supposed to equal that of Luna tokens. While this algorithmic peg is innovative, many critics were against employing it on a large scale.
As such, when a huge amount of UST was liquidated, the delicate balance between UST and Luna was broken. This ultimately led to UST falling in value, and Luna being delisted on many exchanges.
However, since Tether is backed by the reserves of a fiat currency, it’s unlikely for it to fall in this manner. Even with this, many crypto investors are not confident in Tether after the fall of UST. One of the biggest reasons for this stems from the fact that Tether has never been transparent with its reserves.
So, the fall in UST caused a fall in the value of USDT, which dropped to $0.97. Although USDT’s value regained its market peg a few days later, its market capitalization dropped. The Tether market capitalization dropped from $83 billion to $75 billion.
In June 2022, that value dropped lower to $66.4 billion. Regardless of this drop, Tether still retained its market peg, and it remained the largest stablecoin by market cap.
Crypto experts such as DigitalCoinPrice and Wallet Investor also see a great future for this stablecoin. DigitalCoinPrice predicts that besides a few minute changes, Tether will remain at $1.01 for 2023, 2024, and 2025.
Wallet Investor believes that Tether will start 2023 at $1.001 and finish with a $0.993 average. In 2024, they believe that Tether will start at $0.994 and finish at an average of $0.973. For 2025, they believe that Tether will start at $0.974 and end the year with a 0.951 average.
3 Altcoin Alternatives to Consider
If the Luna price crash may have shaken your faith in other stablecoins, then you should consider altcoins. While altcoins may be notorious for their fluctuations in value, there are some altcoins worth investing in. Some of these altcoins that are worth an investment include:
Dash 2 Trade is a novel idea that has come into the crypto space. This blockchain network is a cryptocurrency analysis and social trading platform. With the analytical data provided on this platform crypto investors will be able to make better-informed decisions.
Dash 2 Trade also offers features that will allow traders to spot trending coins and recognize valuable buy/sell opportunities. Crypto entrepreneurs can also get timely information regarding new coin listings and their legitimacy.
The native token of the D2T network is the D2T token. This token allows users to access the various features of the network.
For a market that’s unpredictable for even experts, being able to offer accurate predictions is immeasurably valuable. Many crypto investors are looking forward to the initial coin offerings of this blockchain network, even if it’s a paid service.
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IMPT is an eco-friendly blockchain project that aims to reduce the harmful impact of blockchain on the planet. The IMPT blockchain network aims to provide a blockchain market for trading carbon credits as Non-Fungible Tokens (NFTs). On this market, people can buy, sell, or even retire their carbon credits.
For now, IMPT has partnered with large organizations like Amason, Microsoft, and River Island to actualize this eco-friendly initiative. They’ve also planned to fund numerous eco-friendly initiatives worldwide.
The IMPT tokens are already in their first stage of the presale, where each token sells for $0.018. IMPT is close to finishing the first stage of the presale since they’ve already earned more than $9 million.
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Although cryptocurrency has been around for a while, not everyone is prepared to accept it. However, Calvaria hopes to change that, as they hope to open people to cryptocurrency via gaming.
They plan to create an ambassador between the crypto world and the real world. This ambassador would be a video game that’s available on the mobile app stores, and the blockchain network. The version that will be on the app stores will be free to play, while the blockchain version will be Play-To-Earn.
Some key crypto conversion strategies will also be available on the common version that’ll be on the app stores. This will allow the public to warm up to cryptocurrency, and get used to it.
One of the first games in this gamification education strategy is Calvaria: Duels of Eternity. The native token for the Calvaria network is RIA, and it’s already on presale.
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The unexpected price crash of UST and Luna undermined the stability of stablecoins, and also affected other cryptocurrencies. Nonetheless, Tether is largely untouched since it boasts large liquidity, and its tokens are backed by a real asset. If you feel like you can trust stablecoins again, you can consider innovative altcoins such as IMPT, D2T, and RIA.