New crypto traders often encounter terms like BTC/USDT or ETH/USDT, or see USDT required for deposits and trades in crypto financial products. While its price mirrors the US dollar, USDT is often mistaken for USD.
USD vs. USDT
USD (United States Dollar) is a fiat currency, while USDT (Tether) is a blockchain-based stablecoin pegged to the US dollar, created by Tether. USDT can be seen as a crypto version of USD. Initially launched on Bitcoin via the Omni Layer protocol, USDT now operates on Ethereum, Tron, and other major blockchain networks to meet broader use cases.
Features of USDT
As a price-pegged cryptocurrency, USDT combines the secure, transparent transaction features of Bitcoin with USD price stability. This stability makes USDT ideal for daily payments. Businesses and individuals prioritize asset stability, which volatile assets like BTC/ETH lack. Stablecoins like USDT maintain their peg effectively, enabling everyday use.
Blockchain technology also lowers barriers: creating a wallet and sending/receiving USDT takes minutes, with minimal fees. Traditional cross-border transfers (wire or draft) involve high fees and 1-7 day processing times, while blockchain transactions settle rapidly.
USDT in Exchanges
USDT is a cornerstone of crypto trading. Platforms like Bityi offer USDT-based spot trading pairs (e.g., BTC/USDT), allowing users to trade cryptocurrencies using USDT as an intermediary.
In derivatives markets, perpetual contracts margined in USDT (called "USDⓈ-M contracts") let traders hold positions without owning the underlying asset.