Trade with Bitcoin or Tether

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Should you trade with Bitcoin or Tether? This guide explains two strategies: one to expand your BTC stack or simply grow your USDT position.

Cryptocurrency trading has become increasingly popular, with Bitcoin(BTC) and Tether (USDT) being the most commonly traded pairs. If you are an experienced investor or just starting in crypto trading, you may have come across the question of whether to trade against BTC or USDT.

Both options have advantages and disadvantages, making the decision not as simple as flipping a coin. On one hand, Bitcoin, the original cryptocurrency, has the potential for high returns but is also highly volatile. On the other hand, Tether (USDT) is a stablecoin that promises a more stable but less exciting journey.

Before you start trading, it’s important to understand the pros and cons of both options, so you can make an informed decision that aligns with your investment goals. So, should you trade with BTC or USDT? Let’s dive in!

Understanding The Difference Between Bitcoin and Tether

Firstly, the main difference between Bitcoin (BTC) and Tether (USDT) lies in their function and underlying technology:


  • Function: A digital asset with independent value, intended as a medium of exchange and store of value.
  • Technology: Runs on a decentralized blockchain network, where transactions are recorded publicly and secured without a central authority.
  • Volatility: Highly volatile, with significant price fluctuations in short periods.


  • Function: A stablecoin pegged to the US dollar, designed to maintain a constant value of $1 USD per USDT.
  • Technology: Uses a combination of blockchain technology and reserves of real assets to maintain the peg.
  • Volatility: Low volatility, with minimal price deviations from the $1 USD peg.

Secondly, cryptocurrency trading on platforms like Binance or Kucoin can be an exciting experience, primarily due to the availability of numerous altcoins. Binance, for example, has over 200 different altcoins or cryptocurrencies listed on its platform.

Frequently new trading pairs are added on Binance

However, many of these cryptocurrencies are highly volatile, even more so than Bitcoin (BTC). Therefore, trading against BTC for any altcoin pair on the exchange, such as Solana (SOL) or Ethereum (ETH), can be highly profitable to expand your BTC stack.

Alternatively, a more conservative approach would be to trade any altcoin against a stablecoin like USDT. This way, you can still potentially earn high profits, but you would be trying to expand your USDT position on the exchange.

Trading With Bitcoin(BTC)

Expanding your BTC stack by trading altcoins against BTC can be a tempting strategy, but it’s important to approach it with caution and a clear understanding of the risks involved. Here’s a breakdown of the strategy:

The Basic Idea:

  1. Identify promising altcoins: Look for altcoins with strong fundamentals, active development, and growth potential. Think of them as smaller, newer, and potentially faster-growing companies compared to Bitcoin, the established industry giant.
  2. Trade altcoins against BTC: Instead of buying and selling altcoins for dollars, you trade them for Bitcoin (e.g., ETH/BTC, BNB/BTC). This way, potential gains in the altcoin’s value are amplified because you’re essentially betting on it outperforming Bitcoin.
  3. Accumulate more BTC: If your trades are successful, the altcoin gains translate into more Bitcoin, growing your overall stack.

Example: ETH/BTC Trading

Let’s say you have 1 BTC and believe Ethereum (ETH) has strong growth potential. You decide to trade 0.5 BTC for ETH (ETH/BTC = 100 ETH for 1 BTC).

  • Scenario 1: ETH appreciates: If ETH price doubles while BTC stays the same, your 0.5 BTC worth of ETH becomes 1 BTC! You then have 1.5 BTC total (initial 1 BTC + gained 0.5 BTC).
  • Scenario 2: ETH depreciates: If ETH price halves while BTC stays the same, your 0.5 BTC worth of ETH becomes 0.25 BTC. You now have 0.75 BTC total (initial 1 BTC – lost 0.25 BTC).
Trading with the ETH/BTC pair on Binance
Trading with the ETH/BTC pair on Binance

Key Takeaways

  • High potential returns: This strategy can significantly increase your BTC stack if your altcoin choices are successful.
  • High risk: Altcoins are generally more volatile than Bitcoin, meaning losses can be amplified as well.
  • Requires active trading: You need to monitor the market closely and make timely decisions to exit positions and avoid prolonged losses.
  • Not for everyone: This strategy is best suited for experienced traders with a good understanding of technical analysis and risk management.

Trading With Tether(USDT)

Expanding your USDT stablecoin stack by trading crypto against USDT can be a good way to potentially increase your holdings with less volatility compared to trading other crypto pairs. Here’s how it works:

The Basic Idea:

  1. Identify trending cryptocurrencies: Look for cryptocurrencies with strong momentum or positive news that might experience short-term price increases.
  2. Trade these cryptos against USDT: Instead of buying and selling them for dollars, you buy and sell them for USDT (e.g., BTC/USDT, ETH/USDT). This way, potential gains in the crypto’s value are directly translated into more USDT.
  3. Accumulate more USDT: If your trades are successful, the crypto gains translate into more USDT, growing your overall stablecoin position.

Example: BTC/USDT Trading

Let’s say you have 10,000 USDT and believe Bitcoin (BTC) is about to experience a short-term price surge due to upcoming news. You decide to invest 5,000 USDT in BTC (BTC/USDT = 50,000 USDT for 1 BTC).

  • Scenario 1: BTC appreciates: If BTC price increases by 10%, your 5,000 USDT worth of BTC becomes 5,500 USDT! You now have 15,500 USDT total (initial 10,000 USDT + gained 550 USDT).
  • Scenario 2: BTC depreciates: If BTC price decreases by 10%, your 5,000 USDT worth of BTC becomes 4,500 USDT. You now have 9,500 USDT total (initial 10,000 USDT – lost 500 USDT).
Trading with BTC/USDT pair on Binance
Trading with BTC/USDT pair on Binance

Key Takeaways

  • Lower volatility: USDT provides a stable base, reducing the overall risk compared to trading other crypto pairs.
  • Profit from short-term trends: You can capitalize on short-term price movements of promising crypto assets.
  • Requires active trading: You need to identify potential trends and exit positions quickly to avoid prolonged losses.

Comparing BTC and USDT for Different Trading Strategies

Choosing between Bitcoin (BTC) and Tether (USDT) for your crypto trading depends heavily on your strategy. Next, a deeper look into the different crypto trading strategies.

Day Trading

When lightning-fast trades rule the game, Tether shines. Its stable price minimizes short-term fluctuations, reducing the risk of quick dips wiping out your profits. Imagine Tether as a steady boat navigating choppy waters – perfect for nimble day traders.

Swing Trading

If you’re comfortable holding positions for days or even weeks, both Bitcoin (BTC) and Tether (USDT) can be suitable options for you. Bitcoin is known for its potential for significant price swings, which can offer higher returns for those who can tolerate some volatility. On the other hand, if you prefer predictable movements, Tether’s stable price might be more appealing to you. Remember, to trade with Bitcoin or Tether can be challenging as you decide to have open positions for a longer period.

Swing trading requires patience and discipline
Swing trading requires patience and discipline

Long-Term Holding

If you’re looking to invest in cryptocurrency for the long haul, Bitcoin is likely the better choice. Its established position, limited supply, and potential for long-term value appreciation make it a classic option for those who prefer a “buy and hold” approach. You can think of Bitcoin as a sturdy oak tree that can withstand market turbulence and potentially grow tall and majestic over time.

Recommended: Best Places to Stake Stablecoins(earn passive income)


Ultimately, the answer to the question ‘should you trade with Bitcoin or Ether‘ is a personal one. Consider your risk tolerance and trading goals to find the perfect crypto compass for your journey. Remember, both have their strengths and navigating the volatile crypto markets requires careful consideration and timing!

FAQ: Trade with Bitcoin Or Tether?

Is USDT Good for Trading?

In the early days of crypto, the USDT stablecoin was introduced by crypto exchanges like Bitfinex. Additionally, there wasn’t an option to trade against fiat currencies (USD or EUR). Therefore stablecoins like USDT were a good alternative to trade against a dollar-pegged token.

Is It Better To Trade BTC or ETH?

No easy answer! Depends on your risk appetite:

  • BTC: Established, volatile, high-reward/high-risk.
  • ETH: Innovative, diverse ecosystem, more stable but still uncertain.

Choose based on your tolerance for the unknown! Diversification might be wise.

What Are the Risks of USDT?

USDT risks:

  • Centralized control: One company manages reserves, raising trust concerns.
  • Unproven reserves: Full backing hasn’t been 100% verified.
  • Legal and regulatory issues: Potential for crackdowns or restrictions.
  • Peg breaks: Temporary price deviations from $1 are possible.

Consider alternatives like USDC for potentially less risk. Remember, crypto is still wild!

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