With the chaotic phase that the crypto market is going through, Tether (USDT) trading volume in Q1 of 2022 plunged lower compared to the same quarter of last year. The total Tether transaction for the first quarter of 2022 is 26,454.
Even though the bearish trend has seen many investors turning to stablecoins, the interest of investors for USDT remains a bit controlled.
Tether is dubbed to be a stable crypto because unlike Bitcoin, Tether is pegged with the US dollar which means it retains a consistent value over time. It’s a go-to or preferred altcoin especially for investors who have a low risk appetite.
Suggested Reading | What’s In A Name? Ethereum Domain Name Sales Climb 2,300%
What Is Tether?
Tether is a stablecoin which is far more consistent or stable compared to other cryptocurrencies like the two popular BTC and ETH because it’s backed by fiat money. This means Tether has actual US dollars that act as collateral. It basically has the same value as the USD.
Stablecoins act as a middle ground and provide liquidity in an extremely risky and volatile environment allowing crypto to be regarded as a store of value and less than a risky undertaking.
USDT total market cap at $82.28 billion on the weekend chart | Source: TradingView.com
The most popular stablecoins are Tether, USD Coin, and Gemini Dollar which all share the same characteristics backed by US dollars. On the other hand, other stablecoins are backed by silver, gold, and other fiat currencies like yen and euro.
USDT Trading Volume Plummets
Tether’s trading volume went down in the first quarter at $5.3 trillion. Compared to the trading volume of January to March 2021 of 2021, there was a marked reduction of trading volume by as much as 46% or roughly around $9.9 trillion.
Overall, the crypto trading volume has plummeted which also seems to have triggered the dip in Tether trading volume in Q1.
Suggested Reading | Bitcoin Briefly Tops $40,000 As More Countries Adopt Crypto
Price Action Analysis
To analyze the impact of Tether transactions going down on Tether trading volume, it is important to compare the USDT trading volume in the quarter 1 of 2021 to 2022.
January 2021 USDT trading volume is at $3.4 trillion which is higher compared to this year’s Q1 trading volume that registered at $1.8 trillion.
Meanwhile, March 2021 USDT trading volume is at $2.7 trillion which is a bit higher compared to 2022 trading volume in the same month at 1.9 trillion.
January 1, 2022 trading price for USDT is at $1 and it closed quarter 1 at $1. Tether is definitely as stable as it can get; literally.
Featured image from Shutterstock, chart from TradingView.com