According to the market data before the deadline, USDT's current circulation market value has reached 51.21 billion US dollars, the circulation value is 51.154 billion, the 24-hour transaction volume is 184.054 billion US dollars, and the 24-hour turnover rate is as high as 359.08%. It can be seen that USDT can be said to be the most traded digital currency in the currency circle. The main reason for this phenomenon is that USDT is a digital currency benchmarked against the US dollar. As we all know, the price of USDT is not static, but not many investors know the reasons for the change of USDT price. So, why does the price of USDT change? The following currency circle editor will give you an in-depth analysis of the factors that affect the price of USDT.

 Why does the price of USDT change?

As we all know, in theory, the hair style of USDT is 1:1 with reference to the US dollar, that is, 1USDT=1 US dollar. In order to anchor the price of the US dollar, for each additional USDT, Tether will deposit 1 US dollar into the bank, thereby ensuring the safety of investors' use and withdrawal. At the same time, users can also query funds through its official website to monitor the security of their funds at any time.

However, with the development of the market and the imperfect laws and regulations, and the immature regulatory measures, many people are skeptical about whether Tether's bank account really has enough margin. The increase in USDT and the credit crisis of its issuing company have also led to a gradual increase in the volatility of USDT.

It should be made clear that the essential factor affecting the stability of USDT in the market is the supply and demand relationship in the market.

When supply exceeds demand, the USDT premium rate is low or even negative; when supply is insufficient, the premium is high, so when is it easy to have a significant premium rate?

When the market is hot, OTC funds continue to pour into the currency circle, and USDT, as an entry, has increasing demand and insufficient supply, which naturally leads to its price increase; when the market is sharply down, many investors need to exchange tokens for stablecoins or legal currencies for hedging. At this time, it mainly depends on the change in demand, and USDT may have a positive premium or a negative premium.

 Introduction to factors affecting USDT price changes

1. The demand and supply of USDT in on-site transactions tend to be tight.

2. Market declines lead to the sale, closing, and explosion of futures contracts.

3. OTC funds enter the market.

4. Changes in the proportion of BTC market value.

5. The trading volume of fiat currency trading pairs on exchanges.

6. Changes in the number of BTC in the exchange address.

1 USDT equals 1 USD only from Tether's promise, and Tether is suspected of overissuing USDT and faces compliance risks. Logically speaking, USDT should not be able to be pegged to the US dollar.

But the fact is just the opposite. In the market, USDT can still fluctuate slightly around the US dollar.

Imagine if you are going to sell a USDT, what would you do? Would you find Tether to exchange it? Although Tether promises to exchange it, it has set up a series of obstacles and the arrival time is also slow.

If you are a Chinese who does not have a US dollar bank card (you are most likely), you will have no way to find Tether to exchange it. So you will most likely sell it in the OTC market.

In this way, USDT is completely left to the market to price, and it is left to the most market-oriented market in the world-the digital currency market, where there is almost no intervention and externalities are not obvious.

Combined with the purpose of USDT - to replace the US dollar in the function of trading with digital currencies - then it is natural for the market to price USDT at $1.

USDT has become a consensus currency. Although Tether's price will be affected every time it is accused and exposed, it can always return to around $1 through market adjustments.

The above is the explanation of why the price of USDT changes. Finally, the editor of the currency circle would like to remind investors who want to invest in digital currencies to make reference analysis and recognize the time. Nowadays, some investors often do not pay attention to this when obtaining information. At night, they hear on the radio and TV that there are large institutions predicting the possibility of an increase. They see that the price of the currency may have an upward trend, and they jump into the market without thinking. As a result, the price of the currency does not rise but falls, which makes them look downcast. After thinking about it carefully, they find that this comment is just a prediction of the morning market, or even the prediction content of last night.

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