Why am I not optimistic about $USDT? Will USDT be the biggest mine in the currency circle?
USDT is a stablecoin whose value is pegged to the US dollar. Each USDT is equivalent to one US dollar. It is issued and controlled by Tether. It is precisely because it is issued by a single company that it has some problems:
First, Tether has not disclosed the reserves of USDT publicly and transparently. We don't know whether they really have enough US dollars to support the value of USDT. Once the trust of users is lost, it will trigger panic selling by users. In 2018, the price of USDT once fell below $1, causing market fluctuations.
Secondly, USDT has also been under some legal and regulatory pressure. It was previously sued by New York prosecutors, accusing them of covering up a funding gap of $850 million in 2018 and misleading investors. Although the two parties finally reached a settlement agreement of $185 million, this also brought adverse effects to USDT.
Third, USDC, which is also a stablecoin, is much more transparent and decentralized. Their assets are placed in custodial banks and provide audit information, and they are also favored by more and more institutional and individual investors.
In short, in order to avoid this super black swan event, you must not convert too many of your assets into USDT. You can diversify them into some decentralized stablecoins, such as USDC, DAI, LUSD, etc., and also pay attention to whether their liquidity is good.
