USDT (tether) Trading Platforms

Written by Zornitsa Stefanova

Zornitsa Stefanova

Zornitsa Stefanova is experienced forex and crypto analyst. She also covers various financial topics such as stocks trading and retirement investments.

, | Updated: July 15, 2024

Since its inception in 2014, Tether (USDT) has remained a powerhouse in the world of crypto trading. The first of its kind, Tether is a stablecoin that is pegged to the US dollar, and when it launched, it provided blockchain enthusiasts with stability that was unprecedented at the time.

Although new stablecoins have since been introduced to the cryptocurrency market, USDT continues to maintain an impressive market cap, and it is still the most prominent stablecoin to date. It is, therefore, crucial to become familiar with these cryptocurrencies if you are planning on trading crypto. If you would like to learn more about this cryptocurrency and its place in the crypto market, feel free to continue reading.

Comprehensive Comparison of the Top 5 USDT Trading Platforms

Best Platforms for Buying and Exchanging USDT

1. Binance

   Established in 2017, Binance maintains a daily trading volume that makes it the most prominent exchange as of 2024. Supervisory entities like the JFSA (Financial Services Agency of Japan), CNAD (Comisión Nacional De Activos Digitales), and VARA (Dubai Virtual Asset Regulatory Authority) are among the various regulators that supervise the operations of Binance, which allows the exchange to have an audience from plenty of jurisdictions. This is, in part, one of the reasons it maintains a high trading volume.

   Binance traders have access to dozens of cryptocurrencies, including but not limited to staples like Tether, Bitcoin, and Litecoin. We should also stress that Binance is considered suitable for individuals who are price-conscious, seeing as its fees are relatively budget-friendly. Spot margin fees, for instance, may stand between 0.01% and 0.1%.

   Last but not least, Binance is the perfect platform if you are planning to trade on the go, seeing as a dedicated application that can be downloaded on both iOS and Android devices is available.

2. KuCoin

   KuCoin is a Hong Kong-based exchange that made its debut in 2017, and as of 2024, it ranks among the top ten crypto exchanges in terms of trading volume. Purchasing USDT is a breeze at KuCoin, and clients have 60+ fiat currencies to pick from, while the methods provided are credit or debit cards. Spot trading, futures, and margin trading are available, and users are free to trade a plethora of cryptocurrencies.

   Security plays a crucial role when it comes to the safe trading of cryptocurrencies, and we are pleased to say that KuCoin provides its clients with suitable security measures. Two-factor authentication is one of the first options KuCoin users can enable, and it can be achieved via email, phone, or Google Verification. A Restrict Login IP option is also available, which will log out the given user automatically when their login IP is changed. A range of anti-phishing features may be utilized as well.

3. Kraken

   Kraken is one of the oldest and most trusted cryptocurrency exchanges that operate as of 2024. It opened its virtual doors in 2011, and its selection of cryptocurrencies includes Bitcoin, Dogecoin, Ethereum, Cardano, and Tether, to name a few.

   Its fee structure encompasses spreads and other forms of billing, and they are considered relatively low in comparison to other crypto exchanges. If you are a Kraken Pro user and plan on delving into margin trading, for example, the opening fee for Tether stands at 0.02%, and the rollover fee is 0.02% per 4 hours.

   Another aspect to consider if one is looking to trade crypto is the leverage. When trading pairs involving Tether, the leverage can range between 2x and 4x, depending on the pair in question. Traders of USDT/CAD, for example, may trade with a leverage of up to 4x or less.

4. Bybit

   Ranking fourth as of 2024 when it comes to its trading volume, Bybit is an exchange that many crypto enthusiasts have chosen to trust. Bybit’s cryptocurrency platform enables clients to engage in spot trading and derivatives. Tether enthusiasts who are newer to crypto trading and would like assistance can also take advantage of Bybit’s trading bot or pay a visit to the exchange’s copy trading page.

   Bybit looks out for its clients by providing customer services that are available around the clock, seven days a week. Users may have their questions answered by Bybit’s useful bot or get in touch with a member of the support staff via email or live chat. Of course, prior to that one may choose to browse the exchange’s excellent Help Center, which is categorized well and features a search bar for the utmost convenience.

5. PrimeXBT

   PrimeXBT is an exchange that was established in 2018, and it has plenty to offer to cryptocurrency enthusiasts. Purchasing crypto can be achieved by bank cards, and the fiat currencies clients can use for this purpose include but are not limited to USD, GBP, JPY, and CAD. As for the products on offer, crypto futures, spot trading, CFDs, and more are what users can look forward to.

   PrimeXBT boasts an impressive rating of 4.4 on Trustpilot, with the most pleased clients giving the low fees, helpful customer support, and the intuitive platform as examples of some of the factors behind their positive reviews. The exchange is excellent for those who prefer trading on a desktop platform, as well as on mobile. Its mobile application can be downloaded from either the App Store or Google Play, depending on one’s device.

Quick Facts About USDT

USDT is something known in the crypto sphere as a fiat-collateralized “stablecoin,” which means that it is pegged at 1:1 to the value of the USD. Also known as Tether, USDT became the first ever stablecoin when it was launched by Tether Limited Inc. in 2014, and it remains the most popular cryptocurrency of this type. At the time of writing, Tether maintains a market capitalization that places it third after Ethereum and Bitcoin.

The vast majority of cryptocurrencies are highly volatile due to decentralization. That is, their value is not determined by a central bank. Given its status as a stablecoin, Tether is not characterized by the volatility that cryptocurrencies are typically known for, however. This stability serves as one of the main perks Tether has over other popular cryptocurrencies like Bitcoin or Dogecoin.

We should mention that stablecoins’ status is not necessarily set in stone, as depegging has been known to occur. This has happened to a number of cryptocurrencies of this type, including Tether, which suffered a depeg on June 15th, 2023 when its value fell to $0.995 in contrast to the usual $0.999. This decrease did not last even a day, but it was nonetheless a notable event that sparked anxiety among blockchain aficionados. Tether should nonetheless be far more resilient to major fluctuations due to being fiat-collateralized as opposed to being backed by another cryptocurrency, and its peg is maintained by cash reserves of the US dollar. Another aspect that often contributes toward confidence in Tether is the fact that the currency has always been able to honor redemption requests.

Although this publication will focus on the tokens pegged to the US dollar, we should note that in addition to USDT, tokens pegged to the euro (EURt) and other fiat currencies are also offered by Tether Limited.

Last but not least, it bears mentioning that USDT very often serves as the base currency that one can utilize when trading.

Crypto Brokers vs. Crypto Exchanges

Trading cryptocurrencies via a traditional broker will prove to be a very familiar experience to those used to trading forex. Essentially, the broker has the role of the intermediary between the traders and the market. Trading can be achieved via derivatives, the most typical example being Contracts of Difference (CFDs).

Once a USDT enthusiast pays a visit to a broker, however, they will notice that Tether is not listed among the available cryptocurrency CFDs due to its status as a stablecoin. This marks the first and most crucial difference between brokers and exchanges for to-be USDT traders.

If you have already traded cryptocurrencies at brokers before and are generally in the know of how brokers work, getting used to exchanges will take some time. Exchanges are typically considered suitable for those experienced in both crypto and trading, which in turn means that trading at an exchange is generally considered more challenging than using a broker.

Another aspect traders should consider is regulation. Typically, crypto brokers are regulated by reputable supervisory entities like the FSA of Britain, CySEC, and the like. In contrast, it is not uncommon to come across unregulated exchanges, which means traders’ experience may vary vastly depending on their exchange of choice. Clients will also need to be alert when assessing an exchange’s licensing status, as non-reputable exchanges might choose to present themselves as having a license that they do not actually own.

The final difference that is of great significance to traders are the trading fees. Traditional brokers have a plethora of fee types that clients must keep track of, with one major example being overnight fees. Exchanges are cheaper to trade at in comparison, especially as overnight fees are not charged.

How to Confirm if USDT Trading Platforms Are Regulated

There are two places where a trader may become familiar with their chosen platform’s regulatory status, with the first being the exchange itself. What one needs to do first involves going to their exchange’s home page and examining its footer, as some regulated exchanges and brokers give an overview of their licenses and license numbers here. Alternatively, one might need to navigate to a page dedicated to regulation, the website’s about section, or its frequently asked questions hub in order to learn about its regulatory status.

However, there have been instances of exchanges or even brokers essentially faking their licensing status by claiming that they own a license they had never obtained, or continuing to list a previously held license that was never renewed and is no longer active.

Therefore, if one’s exchange appears to be licensed, what follows is paying a visit to the regulator in question. Typically, supervisory bodies have registers that are convenient and easy for consumers to browse through. Then, it is simply a matter of using the license number or company name to check if a platform is truly licensed by the regulator in question.

Ways to Trade USDT Online

There are various routes one can choose if they wish to trade cryptocurrencies, with one notable exception being contracts of difference (CFDs). While CFDs are relatively widespread in the trading sphere, blockchain devotees who dabble in trading non-stablecoin cryptocurrencies or are engaged with other types of markets might be disappointed to learn that Tether is not typically listed among brokers’ catalogs of CFD products. This is a consequence of Tether being a stablecoin. Alternatives that are offered by a plethora of crypto exchanges are available, however, with the main examples being spot trading, futures, and margin trading.

Futures

Futures are an excellent option for individuals who are looking to trade this stablecoin but do not wish to actually own any assets in Tether. These contracts are conducted by two traders, with each essentially speculating on what Tether’s price will be in the future, hence their name.

As for individuals who do own Tether, futures are known for being suitable for those looking to hedge their trades, although their speculative nature does mean that a certain degree of risk is involved.

Each futures contract has an expiration date, which dictates the deadlines both parties have until they can buy and sell their respective positions. Exchanges also allow clients to rollover their contract to another one, with a new expiry period which has a deadline reserved for a further date. If an individual does neither and the contract expires, what follows is the automatic settlement. Traders will also be interested to learn about perpetual contracts. These are essentially a type of futures contract, but they do not expire.

Spot Trading

Usually seen as the easiest way for beginners to start their journey into crypto, spot trading involves purchasing and selling a given cryptocurrency at its current market price. Spot trading’s popularity is attributed to the volatile nature of the crypto market.

Spot trading pairs may involve two cryptocurrencies or a single cryptocurrency bought with fiat. In contrast to CFDs, traders who go this route actually own the cryptocurrencies they purchase, but they cannot use leverage.

Margin Trading

Margin trading’s key characteristic is leverage. When one trades with leverage, they are trading with funds they have borrowed from their broker or exchange, which allows them to control large positions and amplify their potential profits. In order to engage in this type of trading, however, the trader must provide their platform with a collateral, which is dubbed the margin.

Trading USDT with Leverage

The main way one can take advantage of leverage when trading Tether is via the margin. As established, it involves providing one’s platform with collateral in exchange for trading with positions that are higher than one would be able to afford without leverage. The said collateral, i.e., the margin, is necessary for the position to continue being open, and it also determines the leverage ratio. If an exchange’s margin requirement for a given position is 50%, for instance, the ratio shall stand at 1:2, while a 33% margin implies a 1:3 ratio.

What aspiring USDT traders should keep in mind is that trading with leverage carries quite a lot of risk. While it is true that the potential profits are far higher than trading without leverage, this magnification is also reflected in the losses one can incur as well.

What Moves USDT Prices?

Tether can be affected by a range of factors, the first one being supply and demand. When the demand for USDT increases, its value will follow suit. Such an event can be triggered when a large number of investors decide to move away from cryptocurrencies that are far more volatile and instead look for the stability of Tether.

Knowing that the USDT is pegged to the US dollar, it should not come as a surprise to learn that the factors that play a role in dictating the USD’s value will also affect USDT. The first such factor is, as always, supply and demand. If either Tether or the US dollar sees increased demand, the USDT’s value goes up. If demand for the USD were to fall, however, the same would happen to Tether’s own value due to its 1:1 peg.

An increase in US-exported goods and services is what can indicate positive movements for the USD. Due to the USDT to USD peg, this will therefore affect Tether as well. Events tied to regulation may also influence how both the USD and the USDT are treated, and of particular note are pieces of legislation tied to taxation and other changes that may be directly tied to crypto. The same applies to legal matters that have to do with crypto. Finally, global economic events, major statistics, as well as major developments in politics may also become an influence.

Costs Associated with USDT Trading

As is the case with virtually all forms of trading, there are various costs that blockchain enthusiasts will need to take into consideration when they make the decision to trade Tether at a crypto exchange. The first type of costs that most individuals will come across are deposit fees. Such fees are not charged by changes themselves, and may instead be incurred depending on the bank card issuer of a client. What exchanges might charge, however, are withdrawal fees.

The next costs that bear mentioning are transaction fees. These are relatively straightforward, as they are a cost attached when one sends or receives Tether, and their exact amounts vary based on the platform in question. Platforms include Ethereum, Tron, Binance Smart Chain, and Solana. For tether in particular, you will typically find these costs listed under “gas fees”.

Next, we have trading fees that are charged each time a position is opened or closed. These are separated into maker and taker costs, depending on the type of order involved. Makers are essentially liquidity providers who create the market by creating contributing market orders that are not filled immediately. Takers, on the other hand, fill the orders of makers, and their orders are immediate. Makers tend to enjoy lower fees than the latter.

An alternative to the maker-taker model is the spread. This term refers to the gap that can be observed between the highest buy price and the lowest sell price. The wider this gap is, the less profitable the transaction will be due to the inherent cost, and vice versa.

Trading with leverage may also come with specific costs attached. Fees In this category include subscription fees, redemption fees, and management costs.

The last expense traders will need to become familiar with is the liquidation fee. If you decide to partake in margin trading, you might be forced to pay such a fee if you can no longer meet the margin requirements.

Traders will be pleased to learn that overnight fees are not something they will need to worry about when trading Tether at an exchange, as these platforms do to demand such payments from clients.

Reasons For and Against Trading USDT

While USDT can be an interesting way for one to diversify their trading strategies, it is crucial to become familiar with the pros and cons of Tether before one decides to commit.

USDT is one of the biggest cryptocurrencies in the world, and it therefore supports a variety of blockchains. Its status also makes its presence guaranteed at pretty much any popular crypto exchange that operators at the time of writing.

Next, USDT traders-to-be will be pleased to learn that the crypto trading market does not go offline. It operates around the clock, every day of the week, which is an advantage that makes USDT trading more convenient than going for forex trading, for instance.

Another thing traders should keep in mind is USDT being a stablecoin pegged to the US dollar. This gives Tether relative stability, which contrasts volatile cryptocurrencies, and makes tether suitable for expenses other than trading.

As for why you might want to avoid USDT, one of the major disadvantages of this cryptocurrency is the fact that there are fewer platforms to pick from. As USDT is a stablecoin, the vast majority of brokers are unlikely to support USDT trading unless it is the quote currency. However, this also means that one is going to stick with crypto exchanges, which are less costly than brokers as many do not impose overnight fees and costs are generally lower.

Another potential issue that once again stems from Tether’s stablecoin status is its attractiveness when it comes to spot trading. Individuals who go for this type of trading typically seek to capitalize on the frequent and often major fluctuations of typical cryptocurrencies. Tether’s volatility is low in comparison, which means an even closer monitoring is warranted to capitalize on minute changes.

In general, regulation appears to be more lenient when it comes to exchanges in comparison to brokers, which adds another downside to USDT not being widely available to trade with brokers. This means that traders might come across an exchange that seems appealing but that does not have satisfactory regulatory approval. Alternatively, it is also likely to run into an exchange that is licensed but only in jurisdictions a user does not reside in.

There are also some transparency issues that have turned some traders away from Tether. Namely, its company is known for being somewhat untransparent regarding Tether’s reserves. This seems to have changed to an extent in 2024 as Tether has begun providing regular breakdowns, however, its reserves have not been thoroughly audited by external entities.

Written by Z. Stefanova