It’s hard to imagine that we now live in a world where there are thousands of cryptocurrencies to choose from—a feat that would have been unthinkable 12 years ago.
With so many choices now available, it can be a little overwhelming to choose which one to invest in. To give you a little help, we’re bringing up two cryptos that exist on nearly opposite ends of the spectrum: Bitcoin (BTC) and Tether (USDT).
In this article, we’ll be breaking down what they are, how they differ, and how you can use them to your advantage.
BTC: Opportunity in volatility
Bitcoin was created in 2009 by Satoshi Nakamoto—whose identity still remains a mystery to this day—as a peer-to-peer electronic cash system. It’s a newer kind of currency that lives solely digitally and has no physical representation. That’s right: no bills or coins to hold for this one. Instead, people keep their BTC on a digital wallet, allowing them to store, send, and receive funds through a smartphone or computer connected to the Internet.
The great thing about Bitcoin living digitally is that you won’t have to worry about losing your bills and coins or them getting damaged. All you need is access to your wallet—which, in most cases, is just your private key or a password to your account—and you can easily manage your funds.
If you’re wondering about security, there’s nothing to worry about. The BTC network is nearly impossible to hack and really, the only way for you to lose access to your account is to lose your private keys or password.
With it being the first-ever cryptocurrency, BTC has remained at the forefront of the crypto revolution—it has the highest price and the highest market cap. It’s also easily the most recognizable because, at this point, everyone has at least heard of it. With all the platforms that have come up over the past 12 years, it’s the easiest it has ever been to get your hands on BTC. Peer-to-peer marketplaces like Paxful even have a wide variety of payment options, allowing you to buy Bitcoin with PayPal, gift cards, bank transfers, and more.
When it comes to Bitcoin, there’s probably one term that you’ll hear a lot: volatility. BTC is notorious for being extremely volatile, meaning that it experiences rapid price fluctuations. To some, that can make investing in it a little intimidating. However, for others, it can make it more appealing. It may be an incredible risk, but if it pays off, you’re rewarded handsomely—which is why we’ve all heard a lot of stories about people buying fancy sports cars with their earnings.
Despite all the success stories, people needed a new kind of currency: one that would have all the benefits of crypto but the stability of a fiat currency. Enter: Stablecoins.
USDT: Stability in crypto
A stablecoin is a type of cryptocurrency that pegs its value to another asset or external reference such as gold, oil, gas, and fiats like dollars, euro, yen, and more.
One of the most prominent stablecoins out there is Tether. Pegged to the US dollar, it just doesn’t experience the same kind of volatility BTC does. This is really important for two reasons:
It allows USDT to be a viable safe-haven asset. Because they can hold a stable value over time, people can use stablecoins like USDT to preserve the value of their wealth and circumvent any kind of inflation occurring with their native currency.
USDT has all the benefits of crypto. Stablecoins use the same powerful technology and systems that back cryptocurrencies, making them secure and easy to transact with. And just like Bitcoin, it has no physical representation, allowing you to store all your crypto on a digital wallet.
USDT is pegged to the US dollar, giving it a nearly 1:1 ratio in terms of price. If you were to convert 50 USD into USDT, you’d essentially be getting the same amount back. However, it’s now easier to trade, exchange, and redeem as crypto.
Hand in hand
Because of the way both of these cryptos are designed, they pair well with one another.
For example, let’s say that you’ve been HODLing Bitcoin for a while now and a sudden dip in price occurs. Before you lose any more money, you could convert it into USDT until the price somewhat stabilizes and then put it back into BTC when you’re more comfortable. Platforms nowadays will even allow you to do easy BTC/USDT conversions within a matter of minutes.
From here, you can choose one to start with and when you’re more comfortable, you can start exploring more. Ultimately, the choice is yours: BTC or USDT—why not both?
*The content of this article is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.