USDT Explained: What It Is, How It Works, and Why It Dominates Crypto

When you trade crypto, you’re not just betting on price swings—you’re also trying to avoid them. That’s where USDT, a stablecoin pegged to the US dollar and issued by Tether Limited. Also known as Tether, it lets traders hold a digital asset that doesn’t swing like Bitcoin or Ethereum. Unlike other coins, USDT doesn’t aim to grow in value. It’s built to stay at $1, no matter what the market does. That’s why it’s the go-to bridge between crypto and cash—used in over 70% of all crypto trades.

USDT works because people trust it to be backed by real dollars. Tether claims each USDT is supported by cash, bonds, or other reserves. But that trust isn’t automatic. There have been questions—like in 2021, when regulators forced Tether to prove its reserves. Since then, they’ve published more details, but full transparency is still debated. That’s why you’ll see posts here comparing USDT to USDC, the more openly audited alternative. And you’ll find reviews of exchanges like Binance and Bybit where USDT is the most liquid pair. It’s not just a coin—it’s the plumbing of crypto trading.

But USDT isn’t just for trading. It’s used in airdrops, DeFi lending, and even cross-border payments where banks won’t go. You’ll see it in posts about the BAKE airdrop, Sologenic’s token distribution, and even in scams like fake JUSD tokens trying to mimic it. Why? Because if you want to move value fast in crypto, you start with USDT. It’s the default currency of the ecosystem. But that also means if Tether ever fails, the whole system shakes. That’s why some traders keep a portion in USDC or DAI. Others just accept the risk because USDT is still the fastest way in and out.

What you’ll find below isn’t just theory. It’s real stories from traders who used USDT to dodge crashes, earn yields, or get caught by fake exchanges pretending to support it. You’ll read about how Digitex and Zeddex used token models that relied on USDT liquidity—and why those models failed. You’ll see how USDT flows through platforms like Bitsoda and Coinrate, which turned out to be scams. And you’ll learn why even a simple move like swapping ETH for USDT can save you thousands when the market drops.