Tether (USDT) Dominates as the #1 Stablecoin—But Should You Actually Buy It in 2025?

Tether’s USDT isn’t just leading the stablecoin race—it’s lapping the competition. With a market cap that dwarfs rivals, this digital dollar proxy has become the de facto liquidity backbone of crypto. But here’s the trillion-satoshi question: does ‘dominance’ equal ‘investment-worthy’?

The elephant in the room: transparency (or lack thereof)

While Tether’s reserves audit promises keep getting delayed like a blockchain scaling solution, traders keep piling in. The coin’s sheer ubiquity—it’s the gasoline powering most CEX trades—makes it indispensable despite the perennial side-eye from regulators.

Stablecoins: the ultimate ‘hold my beer’ of finance

Let’s be real—you don’t ‘invest’ in stablecoins unless you think parking cash in a digital mattress counts as a yield strategy. But for navigating crypto’s volatility? USDT remains the industry’s duct tape—questionable under scrutiny, yet holding everything together.

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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, 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.

Image source: Getty Images.

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.

However, the reserve reports are attestations, not audits. An audit WOULD take a more thorough look at Tether Limited's finances and evaluate possible problems with its reserves. While this may not seem like a huge issue, Tether Limited has run into legal trouble for misrepresenting its reserves before.

In 2021, the Commodity Futures Trading Commission (CFTC) fined Tether Limited $41 million for claiming that Tether was fully backed by U.S. dollars. The CFTC found that Tether Limited only had sufficient reserves for 27.6% of the days during a 26-month period from 2016 to 2018, putting USDT holders at risk.

That's not Tether Limited's only brush with controversy. Last year, a report by The Wall Street Journal claimed that federal investigators were looking into the stablecoin issuer for possible violations of anti-money-laundering regulations. Tether CEO Paolo Ardoino responded on X (formerly known as Twitter) and said there's no indication the company is under any investigation.

Should you buy Tether?

If you need a stablecoin that tracks the U.S. dollar, Tether is one option. While Tether isn't perfect, it has maintained a price of $1 for most of the time it has been trading, dating back to 2014.

But you may want to opt for a stablecoin without Tether's reputational concerns. I personally think that, the second-largest stablecoin by market cap, is the safer choice. The issuer,, became a publicly traded company in June, inviting more regulatory oversight. It has also published monthly attestations dating back to USDC's launch in 2018, although just like with Tether, these are attestations, not audits.

Either way, stablecoins aren't assets to buy and hold long term. USDC and Tether both work fine as digital currencies that you use for money transfers and trading. For cryptocurrency investments, you're better off with Bitcoin and any altcoins that catch your eye. Crypto should also only make up a small portion of a well-diversified portfolio.