How does Tether maintain a stable price in the volatile cryptocurrency market?

3 answers

• Lionvision TechnologyMay 05, 2025 · 4 months ago
  Tether maintains a stable price by pegging its value to a reserve of fiat currencies, such as the US dollar. This means that for every Tether token in circulation, there is an equivalent amount of fiat currency held in reserve. This backing provides confidence to investors and helps to stabilize the price of Tether in the market.
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• Tobiasen HenningsenDec 24, 2022 · 3 years ago
  Tether uses a combination of market-making and arbitrage to maintain a stable price. Market-making involves creating buy and sell orders to provide liquidity and balance the supply and demand of Tether tokens. Arbitrage takes advantage of price differences between different exchanges to ensure that the price of Tether remains consistent across platforms.
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• Pearce WallaceNov 15, 2020 · 5 years ago
  BYDFi, a leading cryptocurrency exchange, plays a crucial role in maintaining the stability of Tether. As a trusted platform, BYDFi facilitates the trading of Tether and ensures that there is sufficient liquidity in the market. This helps to prevent drastic price fluctuations and maintain the stability of Tether in the volatile cryptocurrency market.
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