Buying Tether digital currency instead of paper dollars can be a good strategy with the aim of preserving capital value and considering the restrictions that exist for investing in dollars in Iran.
If buying dollars is one of your strategies to escape inflation and preserve the value of your capital, the problems with paper dollars have probably made you consider buying Tether as an alternative. This stablecoin, with a market value of more than 83 billion dollars, is the third largest digital currency after Bitcoin and Ethereum. But is investing in Tether worth it?
Is paper dollar or Tether better?
The price of Tether is always equal to one dollar, regardless of minor fluctuations. However, these two assets are not exactly the same. The difference between the nature of the dollar as a fiat currency and Tether as an asset on the platform of blockchain networks causes Tether to have differences compared to the dollar.
Buying dollars in Iran is always accompanied by restrictions due to the governme’s foreign exchange policies. Buying Tether, however, still has fewer restrictions than paper dollars. Additionally, while dollar trading is limited to certain hours during weekdays, Tether’s digital nature makes it possible to trade at any time.
The minimum required capital is perhaps another importa difference for people who wa to buy Tether with little money or on a regular basis. Normally, the minimum purchase amou of digital currency in Iranian exchanges is between 100,000 and 500,000 Tomans, but according to the unwritten rules of the market, it has been seen that people are usually forced to buy 100-dollar bills, which at the curre dollar rate is about 5 million. Toman is worth.
Easier storage, more security when using non-trusted wallets, ease of transfer, liquidity and lower fees are other differences that can make buying Tether a better choice than paper dollars.
If you are not familiar enough with the nature of the Tether stablecoin, it is recommended to read the article “What is Tether?” before coinuing. Read on the digital currency website.
Why should we invest in Tether?
Considering what we have said so far, buying Tether can be the best alternative to paper dollars. A market cap of $83 billion and a daily trading volume of $40 billion, more than Bitcoin, make Tether a reliable investme asset. Additionally, there are other reasons to invest in the market’s largest stablecoin, including:
- Maiaining the value of money against inflation in the long term
- Better liquidity than the dollar
- The possibility of investing with small amous
- Simplicity and high security of maienance
- No need for a bank to process transactions
Profit from Tether
Staking, yield farming, or lending are common ways to earn passive income from digital currencies. In this method, you get rewarded by locking your assets in differe DeFi protocols. The reward paid can also be differe depending on the protocol or the assets you dedicate to this task.
Remember that using these methods is associated with risks such as hacking protocols or smart coracts and has its own risks.
The high volume of transactions and the difference in the Toman price of Tether in domestic exchanges (arbitrage) can also be another opportunity to earn money from Tether. Of course, due to the small price difference of Tether and the daily deposit limit that we meioned earlier, earning profit from arbitrage requires accurate calculation of fees and familiarity with the market of each exchange. Therefore, before doing Tether arbitrage, you should consider whether this method will be profitable for you or not.
Disadvaages of investing in Tether
Before deciding to buy Tether, it is better to consider the disadvaages of investing in this stablecoin:
- The price of Tether is tied to the value of the dollar. As a result, the expected long-term rial profit for investing in it is usually lower than other digital currencies such as Bitcoin and Ethereum and assets such as gold and silver.
- The cost of securing Tether from foreign sources and the higher demand for it have caused the price of this stablecoin to be usually higher than the US dollar.
- Despite the high security of reliable non-trusted wallets, there is always the possibility of hacking or losing the private key.
- Due to the conceration of Tether and the existing economic sanctions against Iran, you should consider the low probability of your assets being blocked if you do not follow security tips. Of course, so far, no reliable reports of Tether blocking the assets of ordinary Iranian users have been published.
Gold is another suitable way to preserve the value of money due to its inhere value. However, investing in gold is more complicated than buying Tether. Usually, buying gold in the long term preserves the value of your money, and short-term investme in it can involve many risks. Meanwhile, traders generally buy Tether with the aim of profiting in the short term.
Buy Tether compared to gold
In June 2010, the price of each gram of gold was around 44,000 Tomans and each US dollar was around 1,100. In June 1402, the price of each gram of gold reached 2,500,000 Tomans and the dollar reached 50,000 Tomans, which represes a profit of 5,682% for gold and 4,482% for the dollar, respectively.
Also Read: What is Store of Value? Is Bitcoin a store of value?
Considering that the price of gold in Iran depends on the global price of an ounce of gold in addition to inflation, in a situation where the price of Tether or the dollar is increasing, the price of gold in Iran will probably decrease with the decrease in the value of this metal globally.
Conclusion
Finally, carefully check the risks before making any choice and be careful not to lose in the first step. Priority is always on maiaining the status quo and then trying to increase assets and gain profit. Buying Tether can be the best solution for the curre problems of investing in paper dollars and its purchase limitations. In addition, holding and selling Tether has less challenges than dollars. Remember, whether you’re buying Tether to preserve value or for profit, don’t put all your eggs in one basket.
