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Chinese (Simplified)Tether (USDT) Is the Largest Stablecoin by Market Cap. But Is It a Buy?
- August 7, 2025
- Category:
Key Points
Stablecoins are becoming increasingly mainstream. President Trump signed the Genius Act into law last month, a landmark piece of legislation that regulates stablecoins. The stablecoin market is worth over $275 billion at the time of this writing (Aug. 4), and some, including Treasury Secretary Scott Bessent, believe it could be worth $2 trillion by 2028.
Tether (CRYPTO: USDT) tops the list of the largest stablecoins , accounting for well over half of the entire market. It has also hit daily trading volumes of over $100 billion. But its success doesn't necessarily make Tether worth buying.
Tether has uses, but it's not an investment
Like many stablecoins, Tether is designed to stay pegged to the U.S. dollar. As long as Tether is working as intended, it will maintain a value of $1. It wouldn't make sense to invest in Tether or any other stablecoin, since they're not going to appreciate in value.
You could, on the other hand, use Tether in any situation where you need a digital dollar. For example, investors often use Tether when trading in and out of other cryptocurrencies. If you want to take out profits you've made on Bitcoin , you could trade your Bitcoin for USDT tokens and then hold those tokens until you've decided on your next crypto investment.
Tether also works well for sending and receiving money over the blockchain. If you send 100 USDT tokens, you can be confident that the value of those tokens will still be $100 when they reach the recipient.
Just like with cash, it's possible to earn interest on Tether. Some crypto exchanges pay 4% or more on Tether balances, which is similar to holding cash in a high-yield savings account. There are also crypto-lending protocols where you can deposit your USDT tokens for use in loans and receive interest payments.
You can do all this with Tether or another U.S. dollar stablecoin. Tether's advantages are its availability and trading volume. Most major crypto exchanges buy and sell Tether; the high volume makes it easy to trade; and there are plenty of places you can earn interest on it, which isn't always the case with smaller stablecoins.
Red flags
Tether is a USD-collateralized stablecoin. The issuer, Tether Limited, claims that every USDT token is backed 100% by reserves, which include cash and cash equivalents, bonds, precious metals, and other assets. It also publishes attestations by an accounting firm, BDO Italia, every three months. Reserves are what make USD-collateralized stablecoins safe, because they ensure that tokens can always be exchanged for their equivalent in cash.