Cryptocurrency News

Tether Pricing Issues

As per the latest news, Bitfinex has reached its neutrality rate leading to a break of a crucial bond with Tether which was the most effective way to redeem USDT for USD. However, whoever wants to apply the Bitfinex method has to go with the normal rate which is very low. Further, tether fee along with their limits is bit high when compared to their competitors. Paxos Standard (PAX) requires minimum fees of $100 and does not have any redemption fees, and the same condition applies to USDC (USD Coin). However, the same condition doesn’t go for the Tether. The minimum redemption limit from USDT to USD is $100,000 which is quite a big amount, and for the acquisition of USDT, the minimum deposit of 0.1% needs to be done. The criteria list doesn’t end here; it includes three tiers of withdrawal fees:

– 0.4% at $100,000 or more

– 1% at $1 million or more

– 3% at $10 million or more

The above-prescribed fees are extremely expensive, and the exchange size is really huge. Further, the clients are permitted only for single transaction per week, but Paxos can do their transaction on a daily basis. These circumstances lead Paxos (PAX) and USD coin in a better position which can grow at a steady rate. The Gemini dollar (GUSD) has been only used for exchange purposes, and its fees plus limits are quite good.

As PAX and USDC are trading at 1% above their value, hence you can earn revenue just by exchanging them against the dollar. Further, USDT is trading at $0.0996 which signifies that if USDT is taken out from Tether, it will lead to a loss from the concept of the one-for-one program. These scenarios have raised questions against the performance of Tether and their motives. The exchange rate will move according to the client’s preferences, which stablecoin they will choose. As Binance and Bitfinex are expanding their stablecoin offering, there might be a situation of improved positions of USDC and PAX, while on the other hand USDT value goes down.

Hence, as per the above-described scenario, unless it is not necessary, it is recommended not to opt for USDT as it will lead to an unnecessary loss. However, if tether introduces some good schemes or offers with low fees and limits in the near future, it can give good competition to PAX and USDC.

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