Let's start with one question: What about the Tether price prediction? In order to find the answer, we should start with the introduction of Tether's USDT token.
Tether’s USDT token has retained its parity with the US dollar after its brief dip to 95 cents early in May 2022, despite a DDOS attack by hackers – but the stablecoin’s system does not have as many assets as it once did.
Tether’s USDT token is designed to be pegged to the US dollar, meaning it is supposed to maintain a constant value of $1. That said, it has not had true parity with the dollar – despite the organisation behind it assuring the coin’s holders that they could still redeem their USDT for $1 – since 11 May.
Given that stablecoins are, by definition, meant to be stable, Tether, the world’s third-largest cryptocurrency, frightened everybody on Thursday 12 May with a sudden fall to 95 cents. The collapse came after another dollar-pegged stablecoin, TerraUSD, had crashed by more than 99% the previous day.
At around 06:30 BST (UTC+1) on 12 May, Tether dropped below 99 cents, falling to a low of £0.9508 within two hours.
The coin had climbed back to $0.9867 within an hour and was at $0.9953 by 16:00 BST (UTC+1), after witnessing a 24-hour trading volume of more than $173bn.
By the following morning, it was worth $0.998 as it made its way back towards full parity with the US dollar and regained its peg. On the afternoon of 13 May it was worth $0.999, achingly close to matching the dollar. While it had not reached full parity by 25 May, it still remained around that level, effectively pegged before finally matching $1 on 18 July – the first time it had reached that level in more than three months.
However, there were other concerns surrounding USDT, as its market cap shrank from around $83bn on 6 May to $73.2bn on 23 May after it was reported by The Guardian that $10bn worth of the coin had been withdrawn since the start of the crash.
On 26 May, its market cap slipped to slightly below $73.2bn, after news that, since the depegging of Tether, the number of wallets with $1m or more in rival stablecoin USDC had surpassed the number of wallets with $1m or in USDT. However, following the announcement that Tether had launched a new stablecoin – MXNT, linked to the Mexican peso – the coin resettled back to $73.2bn.
By 14 June 2022, as crypto stayed in a slump, the market cap was down to $71.52bn but, by 19 August, the coin’s market cap was down to $67.55bn. Nevertheless, it was still the largest stablecoin and the third largest crypto overall.
The initial fall in May appeared to prompt Tether to announce it was performing a “chain swap”, moving across blockchains in a bid to repeg the stablecoin.
Tether price prediction
So is it still possible, after all that excitement, to make a Tether price prediction?
Theoretically, the price of USDT should never shift. Every unit in existence is fully backed by traditional currency that is held in reserve. The stablecoin has almost consistently managed to rank as the world’s third-largest cryptocurrency, behind Bitcoin and Ether. It is also the undisputed market leader when it comes to stablecoins, and is streets ahead of rivals such as Gemini Dollar or DAI.
In 2021 we saw the number of people investing in the coin, and Tether’s overall market cap, explode. The size of Tether more than trebled from that point, surging from $21bn on 1 January 2021 to more than $71bn by 14 June 2022.
The sudden dip of 12 May was a rare wobble for the coin. On 20 January, after news of a potential Russian ban on cryptocurrencies, Tether was the only coin that withstood a market “bloodbath” that saw market leaders Bitcoin, Ether and Solana lose billions in value. The next day, the launch of Tether’s new streamlined, mobile-compatible website saw USDT’s trading volume more than double, while the rest of the market continued to suffer.
On 24 February, Russia started its invasion of Ukraine. The Russian central bank doubled its key interest rates on the Monday, from 9.5% to 20%, as an immediate countermeasure against the rising inflation of its fiat currency. As the dollar soared, Tether witnessed a spike of more than 30% over the course of five days against the Russian rouble.
From the Tether whitepaper
The blockchain’s whitepaper, Tether: Fiat currencies on the Bitcoin blockchain, states: “Common explanations for the current limited mainstream use of cryptocurrencies include volatile price swings, inadequate mass-market understanding of the technology and insufficient ease of use for non-technical users.
“Tether is based on the Bitcoin blockchain, the most secure and well-tested blockchain and public ledger in existence. Tethers are fully reserved in a one-to-one ratio, completely independent of market forces, pricing or liquidity constraints.”
How Tether operates in the wider crypto market
So, what is the Tether price prediction for 2022? And how is the Tether prediction shaping up for 2025, 2030 and beyond? Well, assuming that it continues to remain popular among crypto investors, it is reasonable to say that the USDT price will still be $1.
We do need to ask how a coin whose value should not go up too much has increased its market cap over the past year. Well, USDT can offer a safe haven whenever the markets turn bearish, ensuring that crypto investors can exit their Bitcoin positions without having to convert their capital back into fiat.
Supporters also believe that Tether can have a powerful role when it comes to the remittances market, enabling dollars to be sent worldwide without punishing fees. Tether also contributes to liquidity across the crypto markets and plays a crucial role in the blossoming decentralised finance (DeFi) sector.
In addition, with the overall cryptocurrency market starting to rebound since recent crashes, more people are making use of Tether as a way to trade their existing crypto assets for higher-priced coins.
Forget price predictions, look at supply
Tether’s market cap has exploded in recent months, but governments around the world are starting to explore plans to launch their own central bank digital currencies (CBDCs), with China considerably ahead of the pack in piloting its digital yuan (eCNY).
China tested the digital currency at the Winter Olympics in Beijing. In the Olympic Village, athletes and visitors were able to make purchases with cash, a Visa card or the digital yuan.
The US has confirmed that it intends to develop a digital dollar in the coming years, but does not appear to be in a rush. Would an official alternative eat into Tether’s market share?
Beyond Tether price predictions: Company woes
In recent months, there have been some developments that could have undercut confidence in USDT’s price. One was a long-running legal dispute between Tether, its parent company Bitfinex, and the New York State attorney general.
This came after allegations that USDT was not fully backed by cash reserves, and that Bitfinex took a loan from the stablecoin issuer to plug an $850m gap in its finances that was triggered by the collapse of a payment processor.
Bitfinex and Tether were subsequently ordered to pay damages of $18.5m, and agreed to submit periodic updates on the state of their reserves every three months for the next two years. Both companies were also prohibited from operating in New York.
At the time, Tether said in a statement:
“Tether and Bitfinex are pleased to have reached a settlement of legal proceedings with the New York Attorney General’s Office. Under the terms of the settlement, we admit no wrongdoing. The settlement amount we have agreed to pay to the Attorney General’s Office should be viewed as a measure of our desire to put this matter behind us and focus on our business.”
The legal drama did not end up affecting the latest Tether price prediction, which firmly remains at – yes, you guessed it – $1.
Further woes came on 15 October 2021 when the Commodity Futures Trading Commission in the United States fined Tether $41m for claiming its tokens were fully backed by fiat currencies. Bitfinex was additionally fined $1.5m.
Meanwhile, earlier in the year, Tether was in the news at the start of March after the crypto company announced on Twitter that it had been ordered to pay a ransom of 500 BTC, or else “sensitive documents” would be released. At the time of the demand, this payment would have been worth $27.5m.
Despite an outside chance that this could affect Tether (USDT) price predictions, the company stood firm and said that it was refusing to bow to the demands. Tether wrote:
“It is unclear whether this is a basic extortion scheme like those directed at other crypto companies, or people looking to undermine Tether and the crypto community as a whole. Either way, those seeking to harm Tether are getting increasingly desperate.”
There have been some outlandish Tether price predictions made elsewhere that suggest the crypto could be worth way over a dollar in the 12 months to come, driven by demand from institutional investors.
But the chances of such a USDT price prediction coming true are extremely slim, and although rapid growth might seem like a good thing, it could be disastrous for an asset that has built its reputation on dependably mirroring the value of $1.
It will be interesting to see whether Tether’s market cap continues to grow and whether a Tether price prediction for 2025 or other years will remain consistent.
Is Tether a good investment?
Potentially. Because it’s a stablecoin, it should keep to a value of $1, give or take a fraction of a cent. That’s the point of it – it isn’t meant to make or lose money in and of itself, but rather to be a stable store of value. This is why a USDT price prediction tends to be a fairly undramatic affair compared with other cryptocurrencies, even if the brief depegging of 12 May might have caused concern.
That said, you need to do your own research, remember that prices can go down as well as up, and never invest more money than you can afford to lose.
How much will Tether be worth in 2025?
Ideally, Tether should be worth $1 – that is what it is intended to do. A USDT price prediction from DigitalCoinPrice suggests it will should be $1.01 in 2025, while Gov Capital has an average Tether price prediction of $2.558 for 19 August 2025.
These predictions should be taken with a pinch of salt, however. One would expect that, because the USDT price is designed to be $1, its creators will do everything they can to peg the price to the dollar. Remember that forecasts are very often wrong, too.
Hope this article can provide you with a better understanding about Tether price prediction.
