The Many uses of USDT on Exmo

Exmo is a widely used crypto exchange known for its laid-back approach to the sale and purchase of decentralized assets. Moreover, it supports a large number of fiat currencies, making it a good middleman and financial provider for both types of money. It’s clean, fast, and comfortable.

USDT plays a large role in the Exmo user experience. It can be used to many ends here. You might want to get a supply of these tokens if you want to spend some time on this exchange.

So, what are the main uses of USDT on Exmo?

Trading

USDT is often used as a trading pair on cryptocurrency exchanges. Traders can use USDT to trade against other cryptocurrencies, such as Bitcoin (BTC), Ethereum (ETH), or various altcoins. This allows traders to quickly move in and out of positions without needing to convert their funds back to fiat currency.

Trading and investments are a classic way to utilize the potential of this stablecoin. It’s not really as good because USDT doesn’t change value against USD. So, it can’t be used to, for instance, passively gain income unless you buy it with a lesser cryptocurrency or another fiat currency, but the latter is just Forex trading at this point.

Fiat trading

Speaking of Forex trading, besides buying and selling crypto, it’s also possible to buy fiat currency using USDT, and vice versa. The fact that both types of money are present on the exchange presents countless opportunities — not just for trading, but also for personal finance, purchases, and other goals.

As for this pseudo-Forex trading, you can actually trade USDT and EUR, which would mean you basically dip half of this currency pair in decentralized technology, benefiting it in many ways. It won’t have the same crazy moneymaking potential as regular crypto trading, but it’s still a good way to spend your time.

Stable storage of value

Traders and investors often use USDT as a way to temporarily park their assets in a more stable form while waiting for trading opportunities. Since the value of USDT is pegged to the US dollar, it can help preserve the value of assets during periods of high volatility in the crypto market.

It’s what USDT was created for, originally. It’s still a cryptocurrency, even though it doesn’t act like one. It means that it has access to nearly every other Bitcoin-based exchange or crypto wallet, as well as the security measures associated with them. At the same time, it’s not prone to the same price fluctuations and market risk as other cryptocurrencies.

Arbitrage

Traders may use USDT to take advantage of price differences between different cryptocurrency exchanges. They can buy cryptocurrencies on an exchange where the price is lower and then transfer them to another exchange where the price is higher, ultimately increasing their holdings.

Moreover, Arbitrage trading is well-suited to algorithmic and high-frequency trading strategies. Automated trading systems can scan multiple markets for arbitrage opportunities and execute trades with precision and speed, taking advantage of fleeting price differences.

In short, you can make Exmo the first part of your arbitrage strategy and another USDT-friendly exchange the second.

Margin trading

The curious, almost unique thing about Exmo is that it offers isolated margin trading. Like regular non-crypto exchanges, it allows users to borrow funds to trade larger positions. USDT, in particular, can be very beneficially used as collateral for margin trading, providing traders with leverage to amplify their potential profits. It’s actually one of the better applications of this currency when it comes to crypto finance.

Avoiding fiat transactions

Some users prefer to use USDT instead of traditional fiat currencies when dealing with cryptocurrencies. This can help them avoid fees associated with converting between crypto and fiat and provide a more seamless trading experience. So, instead of swapping crypto for USD, they simply use the USD stablecoin.

Transferring value

USDT can be used for quick and low-cost cross-border transfers of value between users. It provides a faster alternative to traditional banking systems and international wire transfers. There are few to no regulations on crypto transactions in much of the world, although it may summon some tax obligations.

Hedging against market volatility

Traders and investors may use USDT to hedge against potential losses during periods of extreme cryptocurrency market volatility. By converting their holdings to USDT, they can mitigate exposure to price fluctuations. It’s one of several ways of effective price mitigation. USDT works great for it because it’s not tied to the price fluctuations of Bitcoin like any other coin is.

Diversification

The other risk mitigation strategy is diversification. You’ll basically dilute your portfolio by adding a cryptocurrency whose value isn’t tied to the price of Bitcoin like it is with so many other coins. Part of your portfolio can be stablecoins, which will make it easier for you to live through rough times by sacrificing a small portion of your passive earnings.

Summary

USDT has plenty of uses on Exmo. You can’t really say that it’s the best exchange for USDT. It is, however, a very comfortable and simple application that gives access to both fiat and crypto money, and USDT plays a very useful role as a link between them.