How to buy Tether: A step-by-step guide for beginners

Stability and crypto price swings have historically mixed like oil and water – but the rise of stablecoins changed that. Unlike Bitcoin (BTC) or Ethereum (ETH), stablecoins maintain a 1:1 peg to a real-world asset, most often the U.S. dollar. 

Among the hundreds of stablecoins available, Tether Limited’s USDT stands out as the first and most liquid across multiple blockchains. It’s a go-to option for traders looking for more predictability in their crypto portfolios. 

In this guide, we’ll explain how to buy Tether and highlight important precautions to consider before you buy.

How to buy Tether

As cryptocurrency’s oldest and largest stablecoin by market cap, Tether (USDT) is highly liquid and widely available, making it relatively easy to buy on most trading platforms. While each exchange may have slightly different steps, most follow a similar process. 

1. Find an exchange with USDT 

Start by checking which crypto exchanges offer Tether trading pairs. You can search for “Tether” or “USDT” on price aggregators like CoinGecko or CoinMarketCap. On Tether’s price page, the “Exchanges” lists centralized exchanges (CEXs) and decentralized exchanges (DEXs) where you can trade for USDT. Before committing to a platform, compare security reputation, fees, and features like staking to determine which fits your needs.

2. Sign up for a crypto exchange

Once you’ve picked an exchange, create an account via its official website. Most CEXs require know-your-customer (KYC) verification to comply with anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations. You’ll likely need to provide your full name, address, phone number, and a photo of a government-issued ID. After passing these checks, you’ll have access to a verified trading account. 

3. Fund your trading account

Many CEXs allow you to fund your account with fiat currencies like USD or other cryptocurrencies. To deposit fiat, you can often link a bank account and use Automated Clearing House (ACH) or wire transfers. Some exchanges also accept PayPal, debit cards, or credit cards, though additional fees may apply. 

To deposit another cryptocurrency, use the unique wallet address that the exchange provides for that specific digital asset. For example, if you’re sending 0.01 BTC from another wallet to buy USDT, you’d copy the Bitcoin wallet address from your exchange account and set it as the recipient while transferring funds from your crypto wallet. 

4. Select an amount of USDT to buy

Once funded, search for a USDT trading pair on the exchange. Trading pairs represent the two assets you can swap, such as USD and USDT. For example, if you have $500 in your account, you can trade it for 500 USDT. Enter the amount you want to convert and review fees before confirming your order. 

5. Process the transaction 

Once you’ve reviewed your order, confirm the transaction to complete your crypto purchase. A market order executes instantly at the current market price, while a limit order allows you to set a specific price. Limit orders are useful when exchanging more volatile cryptocurrencies like Ethereum (ETH) for USDT. Once the order clears in the exchange’s order books, your account balance will reflect the new Tether tokens.

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Things to consider before buying USDT 

Buying Tether has become easier on many crypto exchanges compared to its early days, when fewer platforms supported stablecoin purchases. Still, there are a few factors worth considering to help you choose the best payment method and stay on the right side of crypto regulations.

Exchange fees and spreads

Each crypto exchange has its own fee schedule, which may include commissions and transfer fees that affect your purchasing power. A platform’s liquidity and the difference between its buy and sell prices (the spread) also impact how much USDT you ultimately receive. 

KYC requirements

As mentioned, most CEXs require users to pass KYC checks to trade cryptocurrencies like USDT. If you’re not comfortable sharing personal information, you might consider using decentralized finance (DeFi) protocols that support Tether without strict KYC policies. 

Transaction limits

Some platforms impose daily caps on how much USDT you can buy or sell, often based on your KYC verification level or the exchange’s trading volume. These limits are especially relevant for high-volume traders using strategies like arbitrage. 

Withdrawal options and blockchain compatibility

If you plan to move your USDT off an exchange, make sure the exchange allows withdrawals to a self-custodial wallet. Also, check which blockchain network (e.g., Ethereum, Tron, or Solana) the platform uses to avoid sending it to an incompatible wallet address. 

Regional availability and regulation

Over the years, several national governments have questioned Tether Limited’s operations and the security of USDT. To ensure compliance, stay current with your region’s cryptocurrency regulations, and check Tether’s list of restricted territories where using USDT may be limited or unavailable. 

Is Tether safe to buy and hold?

Many consider Tether to be one of the more reliable stablecoins thanks to its size and long history. However, some traders and government agencies remain concerned about the transparency of Tether Limited’s reserves and its relatively lighter regulation compared with U.S.-based stablecoin issuers like Circle. 

Even with these critiques, USDT has consistently maintained its peg to the U.S. dollar since launch and continues to be the largest stablecoin by market capitalization and daily trading volume.

Is there a way to buy USDT with no fee? 

It’s rare to find an exchange – centralized or decentralized – that charges zero fees to trade USDT, outside of special, short-term promotions. To avoid scams, traders should stay cautious of platforms advertising a crypto trading experience that’s free of fees. 

What’s the difference between USDT on ERC-20, TRC-20, and other networks?

Unlike coins with their own blockchain, USDT is a tokenized asset issued on top of multiple supporting blockchain networks. Because of this, there are several versions of USDT, each designed to meet a specific token standard that’s compatible with a particular crypto network. 

While every version represents the same $1 value, USDT tokens only work within their own ecosystem. For example, ERC-20 USDT is designed for the Ethereum blockchain, while TRC-20 USDT operates on Tron (TRX). Always double-check which USDT standard an exchange offers to ensure it’s compatible with your intended wallet or blockchain transactions. 

Stay on top of stablecoin taxes with CoinTracker 

Stablecoins stay at set levels, but that doesn’t mean they’re free from tax implications. Whether you’re swapping in and out of Tether or using stablecoins for staking and liquidity pools, the IRS still needs a record of every transaction. 

CoinTracker makes it easy to keep your crypto activity organized. Connect your exchange APIs and public crypto wallet addresses to see your total crypto holdings in real time. Our crypto tracking software simplifies the process of estimating total gains and losses and generates IRS-compliant tax forms ready for your CPA, TurboTax, or H&R Block.

Discover how CoinTracker takes the stress out of crypto taxes – get started for free today.  

Disclaimer: This post is informational only and is not intended as tax advice. For tax advice, please consult a tax professional.