Bitcoin and the cryptocurrency market as a whole is highly volatile. It is very much unregulated, open 24/7, and highly susceptible to price manipulation. It’s not atypical to see extreme price swings in the span of minutes, and it is very difficult to analyze the patterns of the market.
Because of this, cryptocurrency is generally seen as a very risky investment. Additionally, many national fiat currencies are subject to price manipulation and rapid changes in price. For this reason, highly liquid currencies such as the US Dollar and the Euro are seen as stable reserve investments. Nations with high rates of inflation will invest in these reserve currencies in order to protect the value of their wealth, and the appeal of Tether is similar to this idea.
If you’d like to transact via blockchain, but you don’t want your assets to be tied into a highly volatile and unpredictable market, USDT presents is an appealing option. Potentially, USDT could also be used as a stable store of value for residents of countries where inflation and currency manipulation are a serious problem.
However, holding stablecoins for a long period of time does come with some pretty substantial risks – namely, you have to trust that the issuer of the stablecoin will stay in business for a long time, and continue operating their business honestly.
Generally, it’s not advisable to use stablecoins to store wealth for longer periods of time.