🔍 USDT: The biggest mine in the currency circle? 💣

USDT, a stablecoin pegged to the US dollar, is issued by Tether. Although it occupies an important position in the crypto market, it has some worrying problems:

1️⃣ Reserve transparency issue: Tether has not disclosed the USDT reserves openly and transparently. We cannot be sure whether they really have enough US dollars to support the value of USDT. Once users lose trust, panic selling may be triggered. In 2018, the price of USDT once fell below $1, causing market fluctuations.

2️⃣ Legal and regulatory pressure: Tether was sued by New York prosecutors, accusing them of covering up a $850 million funding gap in 2018 and misleading investors. Although a $185 million settlement agreement was finally reached, it brought adverse effects to USDT.

3️⃣ Advantages of competitor USDC: USDC, which is also a stablecoin, is more transparent and decentralized. Their assets are placed in custodial banks and audit information is provided, which has been favored by more and more institutional and individual investors.

🛡️ Diversify risks and choose safer stablecoins:

In order to avoid this super black swan event, do not exchange too many assets for USDT. You can diversify your investments into some decentralized stablecoins, such as USDC, DAI, LUSD, etc., and also pay attention to whether their liquidity is good.

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