How to Buy Tether 

How to Buy Tether 

Tether or USDT is the world’s most traded asset and no wonder! You can find it on almost any cryptocurrency exchange, buy it very easily, and buy almost any cryptocurrency in the market with USDT.

In this guide, we’ll cover the best exchanges to buy Tether and suggest some payment and storage options, so let’s start.

What Is Tether?

Tether is probably the most well-known cryptocurrency on the planet, right after Bitcoin. It’s the third biggest cryptocurrency by market share, and the first by trading volume. 

Why is it so popular? 

Well, because you can trade almost any cryptocurrency with Tether. It’s the main liquidity provider for the crypto market.

How does it provide liquidity? 

You see, Tether is a stablecoin pegged to USD on one-to-one, meaning a Tether token is always worth 1 USD, except for minor price swings due to large market orders. You can buy 100 USDT for 100 USD, and use those tokens to buy almost any cryptocurrency on the planet. When you want to cash out your tokens, you can always sell them for USDT and then sell USDT for fiat money.

In other words, Tether is the main way traders enter and exit the crypto market.

Of course, Tether isn’t the only stablecoin in the market (its biggest rival is USD Coin by Circle), but as the first one, it has been immensely popular since its launch in 2014.

But despite its popularity and usefulness, Tether has a pretty controversial history that makes it simultaneously the most useful and the most risky asset in the crypto ecosystem.

Tether is issued by the same company that owns the crypto exchange Bitfinex. Tether and Bitfinex concealed the relationship between the two companies until Paradise Papers leaks showed they were owned and managed by the same people in 2017.

Further revelations showed that Tether transferred a significant amount of assets (around 700 million USD) to Bitfinex to keep the exchange functioning after it lost a considerable amount of funds following a banking failure. The move left Tether without enough funds to back up USDT one-to-one, as a US fraud investigation proved in 2019.

Further legal and journalistic probes revealed that Tether had been largely unbacked during much of the 2018-2021 period, meaning a strong bank run during this time could have led the cryptocurrency company to bankruptcy. While this scenario didn’t occur, it alarmed the industry leaders and US politicians, as Tether trading had become the backbone of crypto markets. 

Tether paid significant amounts in fees to settle several lawsuits against the company and was ordered to produce official audits that prove USDT tokens are backed by company reserves. While Tether regularly releases data on its reserves, the company hasn’t yet held an official audit and maintains its dominance over the market largely thanks to its popularity.

Critics have pointed out that if Tether crashed, the ensuing market crash could wipe out the entire crypto market. That’s why Tether is considered simultaneously the most useful and the most risky crypto asset in the crypto realm.

What Is the USDT token?

USDT is Tether’s stablecoin pegged to USD. Tether used to claim that each USDT is backed by a dollar in the bank but now claims that Tether reserves consist of different assets, including commercial paper, bonds, ETFs, and so on.

Tether’s reliance on Chinese commercial paper is regarded as a huge risk for the asset, as it leaves the asset vulnerable to market crashes. Tether claims to have decreased its commercial paper use since 2021.

As of October 2023, there are around 83 billion Tether tokens in circulation. It’s hard to estimate how many of these tokens are backed by Tether reserves without an official audit.

Since Tether is a stablecoin, its value always remains the same. Therefore, unlike most other cryptocurrencies, you can’t make a profit by buying USDT cheap and selling it high. As such, people don’t buy Tether for investing in it. It’s mostly considered a trading instrument to buy and sell different coins.

You see, entering and exiting the crypto market would be quite difficult without stablecoins like USDT. There are a couple of reasons for that. 

First, most cryptocurrencies aren’t exactly liquid. Even when their market share shows millions of dollars of worth, in reality, there is very little real money invested in these assets. Most of their value depends on crypto trading prices based on stablecoins.

Another reason is that most cryptocurrency exchanges can not provide fiat-to-crypto trading due to banking and anti-money laundering regulations. They instead offer crypto-to-crypto trading, which allows you to trade Tether (or another stablecoin) for the cryptocurrencies you want to invest in.

Overall, that means you can’t buy and sell most altcoins with fiat money, but you can easily do so through Tether.

Where Can I Buy Tether (USDT)?

The great thing about Tether is that you can buy and sell it on almost any cryptocurrency exchange in the world, in addition to several third-party sellers, like financial investment apps and money channel services. We can safely say that you are spoiled for choice.

Since Tether is mostly used as a trading medium, it doesn’t make sense to buy USDT on a platform where you can’t withdraw or exchange it for other assets. This rules out some options like Uphold or eToro where crypto trading can be very limited. However, if you are only trying out crypto trading by dipping your toes in the market, and already use financial investment apps like Robinhood or eToro, you may find them easy to navigate.

However, if you want to buy Tether to invest in different cryptocurrencies and to make a profit by trading, it’s best to open an account on CEX to start. CEXs are centralized crypto exchanges, companies that focus on selling and trading digital assets. You have probably heard of some famous CEXs like Binance and Coinbase, though there are hundreds more in the market.

You may have also heard of decentralized cryptocurrency exchanges or DEXs. While these platforms offer higher profits compared to CEXs, they are not suitable for beginners as they don’t allow fiat-to-crypto trading. If you are a beginner, you have to enter the market by buying digital assets with fiat money first. However, once you buy USDT and learn a bit more about crypto trading platforms, you can start using DEXs to buy and trade more Tether.

These days many centralized crypto exchanges offer an easy buy function that helps beginners purchase USDT and other cryptocurrencies in a few clicks. That means you don’t have to learn how to navigate advanced trading platforms to start buying and trading digital assets.

Most crypto exchanges are free to join and you can gain perks and privileges based on your monthly trading volume.

We have compiled a list of the most popular cryptocurrency exchanges in operation, reviewing each platform to show you the benefits and drawbacks of using these companies. You can also check out our more detailed reviews for each company.

If you are overwhelmed by the amount of options, don’t fret. In the next section, we will direct you to some of the best exchanges you can use to buy Tether.

How to Buy Tether?

There are three important questions to answer if you want to buy Tether. 

First, where to buy it? Second, how do you want to pay for it? Finally, how will you store Tether?

We’ll help you figure out answers to each question.

Where to Buy Tether?

As we said before, there are hundreds of crypto exchanges where you can buy Tether. So, how do you pick the right one?

Well, there are a few things to consider. As always, it’s very important to pick an exchange that has a good reputation, but metrics like high liquidity, cheap fees, and a wide range of offered cryptocurrencies also matter.

Thankfully, you have multiple options. For example, US-based users can access Coinbase and Kraken, two famous trading platforms with several benefits.

Coinbase is a veteran exchange that supports over 200 digital assets including USDT. But while you can buy, sell, and trade USDT on Coinbase, the platform incentivizes users to trade in USDC, Circle’s stablecoin, so you will find fewer USDT pairs on Coinbase compared to other exchanges. 

Kraken offers over 120 digital assets and several trading pairs. You can buy and sell USDT with fiat currencies (including USD, EUR, CAD, HKD, and AUD). Kraken is famous for its security and excellent customer service, though fees can be a bit more expensive compared to other global platforms.

Although Kraken and Coinbase both work outside of the US, they face stiff competition from global platforms with cheaper fees and more digital assets. Global platforms are usually based in offshore locations where they can operate outside the purview of US authorities, which allows them to offer unregulated trading services and products at cheap prices.

Bitifnex, Tether Ltd’s sister company, is one of them. Bitfinex offers around 170 digital assets, almost all of which can be traded against Tether on the exchange’s spot market. Bitfinex fees are quite cheap as well.

Binance is, of course, quite well known as it is the biggest crypto exchange in the world. The platform offers over 350 digital assets and several trading services, including futures and margin trading, cheap fees, and more. 

However, Binance has been under legal pressure over its management and is being investigated for fraud. US-based customers can’t access the exchange and new UK customers will not be able to register to the platform.

If you aren’t happy with our suggestions above, you can also check out Gate.io and Kucoin.

How to Buy Tether

Let’s say you decided on an exchange. The next step is to create a free account and complete KYC verification.

If you want to buy Tether with fiat currencies, like USD or EUR, completing identity verification is a must. The process usually takes a few minutes and all you have to do is enter your details (name, birth date, address) and provide a picture of an official ID as proof.

Next, you can add a payment method to your account. With US-based exchanges, you can easily send money to your account via ACH. If you are using a global platform, you may be able to use SWIFT for international money transfers.

If your exchange doesn’t support bank deposits, they may accept credit/debit cards or support third-party payment options like Banxa, Moonpay, or Simplex.

Buy Crypto

Coinbase, Binance, Kraken, Bitfinex…All these exchanges allow you to buy digital assets easily with a few clicks. All you have to do is to click the “Buy Crypto” button on your homepage. 

For example, if you are on Binance, you will see a simple buy form like the one below.

Fill out the form by entering the amount of fiat currency you want to spend, and select USDT as the currency you want to receive. Click “Buy USDT.”

On the next page, you will be prompted to select a payment method. You can enter your credit card information or select one of the offered payment channels to complete the purchase.

Please note that there is a 1% fee for using “Buy Crypto”, while buying Tether on the spot market is much cheaper. There may also be extra fees added to the buy crypto fee depending on your payment method.

After you select a payment method, you will see the total amount of fees you must pay. Your transaction will only be executed if you click “Confirm.”

Spot Market

For a more profitable exchange, you can head over to the spot market to buy Tether. Some exchanges only allow crypto-to-crypto trades on the spot market, but many will sell you USDT in exchange for EUR or USD.

Spot market fees are very small compared to “Buy Crypto” fees, and, depending on your exchange, you only pay between 0.10% and 0.50% on your spot purchases. However, please keep in mind that you can’t use third-party or credit/debit card payment options here. You must have fiat money in your account or deposit fiat money to the exchange via online banking.

To go to the spot market, look for the “Trade” menu and select “Spot Trading” on the exchange homepage. In the spot market, look for a market panel. You will recognize it by pairing tickers you will see, for example, USDT/USD, BTC/USD, ETH/USD, and so on. Click on the markets tab and search for USDT/USD or USDT/EUR.

Click on the USDT/USD pair and fill out the trade form by entering the amount of USD you want to spend on USDT.

How to Store Tether (USDT)?

Once you buy USDT on a cryptocurrency exchange, your tokens will be deposited into the exchange wallet. However, while you can access your funds via this wallet, the exchange has complete control over the funds, and as far as the blockchain is concerned, they own the USDT, not you. These wallets are also known as custodial wallets.

Understandably, this has caused quite a few problems in the crypto ecosystem. Since the exchanges have the final say over the funds, traders may end up losing everything if anything goes wrong. 

And what could go wrong? Well, the cryptocurrency exchange could go bankrupt, the exchange owners could disappear with user funds, or the exchange could be hacked. In these situations, traders are often left without recourse and their investment is as good as gone.

Therefore, it’s generally considered a bad practice to leave huge sums of crypto on exchanges. For example, if you own a significant amount of BTC, it’s better to keep it in a secure wallet where no one but you can access it.

But things can be a little different for Tether. Since USDT is a stablecoin, it’s not designed for long-term investment. It’s there to be used, either to buy or sell digital assets. Since that’s the case, it makes a lot of sense to keep USDT in cryptocurrency exchanges, as it will enable you to quickly execute transactions.

That said, if you own too many Tether tokens, it’s a good idea to own another, more secure wallet to store your tokens until you make your investment. Overall, it’s a good idea to have at least one non-custodial wallet.

Let’s see your options.

Non-Custodial Software Wallets

Software wallets are programs that authorize and keep track of your crypto funds and trades. There are several software wallets you can set up on your computer or mobile device. 

The most popular software wallets are multicurrency wallets where you can manage several digital assets at once. A multicurrency wallet is great if you have a diverse portfolio since you don’t have to keep track of several private keys (you can think of private keys as your wallet password).

With a software wallet, you can easily transfer your assets to other people and exchanges to make quick trades.

However, software wallets have a big weakness – since they are connected to the internet via your computer or mobile phone, they can be hacked via attacks and viruses. Coin piracy is hard to defend against, and since most traders aren’t security experts, they may find it hard to safely operate software wallets.

Some software wallets like Exodus can be paired with hardware wallets to ensure maximum security. If you want convenience and security combined, it’s a good idea to pick a software wallet that can be paired with hardware wallets.

Hard Wallets for Tether

Hard wallets or hardware wallets are USB-like devices with wallet software. While exchange wallets and software wallets are connected to the internet, hardware wallets are impervious to hackers even when they are plugged into your computer. As such, they are considered the best line of defense against crypto piracy.

Most hardware wallets come with special software and even online platforms to help you easily transfer assets from one account to another. These wallets usually come with extra security measures like backup security codes, PIN codes, or fingerprint ID checks to secure them against theft.

Of course, a hardware wallet could get compromised in certain situations. One of the most important safety measures is the “wallet seed phrases” or “backup phrases”.

When you set up a hardware wallet, you receive a certain number of random words. You or anyone else who knows these words could create a backup copy of your wallet. While this is immensely helpful if your hardware wallet is stolen or lost, it means you must keep these seed phrases secure.

You can store USDT in all hardware wallets in the market, including Trezor, Ledger, Ellipal Titan, and Coolwalet models. 

Some of these companies have partnerships with software wallet manufacturers and allow you to access your wallet from your internet-connected devices for certain operations, or take advantage of software wallet features.

While most online and software wallets are completely free to use, hardware wallets may cost between 60 and 400 USD. Since they are quite expensive, you may want to hold off on buying one, unless you know you will make a big crypto investment.