Recently, everyone has been saying that the big boss in the US (the Federal Reserve) might cut interest rates. Based on past experience, cutting rates equals injecting money into the market; with more money, risky assets like Bitcoin tend to rise, which sounds like good news, right?
But this time, before you prepare to go 'all in,' you need to see that the rules of the game and the players at the table are no longer what they used to be.
The first thing: there are finally police on the streets, cowboys can't shoot recklessly anymore.
In the past, the cryptocurrency space, especially stablecoins, was like a Western movie; whoever had the fastest gun was the boss. Many companies claimed that their stablecoins were pegged to the dollar at 1:1, but who knows if there was actually money behind it! Terra/LUNA is a bloody example; it collapsed suddenly, hundreds of billions of dollars evaporated in an instant, and many people's fortunes went to zero overnight.
Now it's different; the police have finally come to work:
* Regulations require you to have money: The US has taken the lead in establishing new rules, simply put, 'if you dare to issue 1 dollar of stablecoin, you must have 1 dollar of real cash or short-term government bonds stored in the bank.' No more using air as reserves or playing the trick of 'I bet you won't come to withdraw money at the same time.'
* No matter where you hide, they will catch you: In the past, many companies registered in unknown small islands to evade regulation. Now this trick doesn't work; if you want to play in the US market, you must follow US rules and reveal your bottom line. This is called 'cross-border pursuit,' and the whole world is learning it, making it increasingly difficult to find loopholes.
This is good news for us ordinary people; at least the stablecoins in our hands won't suddenly turn into worthless paper.
The second thing: that group of suit-wearing big bosses from Wall Street has also jumped in.
In the past, the ones playing with cryptocurrencies were a group of tech geeks and adventurers, but now the big whales on Wall Street have also come swimming in, drawn by the scent of money.
You might not have thought that when you buy U (USDT) or C (USDC), the companies issuing these stablecoins immediately use our money to buy a large amount of 'US government bonds.' This creates a clever cycle: every transaction we make in the crypto space indirectly helps pay off the US government's debt.
Stablecoins are no longer underground or non-mainstream; they have quietly been tied to the big ship of the US dollar. Big companies like PayPal are also issuing their own stablecoins, indicating that stablecoins are transitioning from speculative tools to 'regular troops' recognized by the big players.
The third thing: official digital dollar? The big boss in the US says 'let's wait and see.'
Since stablecoins are so useful, why doesn't the US government issue a 'digital dollar' (CBDC) itself?
This is where it gets interesting. There has been a lot of internal debate in the US about this matter, with many people worried that government-issued digital currency will invade personal privacy (the government will know exactly what you bought and where your money went). Therefore, the progress of the official digital dollar is slow.
This has provided a huge development space for stablecoins issued by private companies. The two main players on the table right now are:
* USDC: Taking the 'good boy' route, trying hard to cooperate with US regulators, aiming to be the representative of the 'American team.'
* USDT: Taking the 'old hand' route, though its identity is a bit vague, it remains the market leader because it has the most users and the widest range of scenarios.
The competition between the two is essentially a battle for the future discourse power of digital finance.
To summarize:
Interest rate cuts may bring about a bull market, but the crypto space is no longer the wild land where you could easily get rich overnight. It has become safer and more compliant, but it also resembles traditional financial markets more. That wild black horse has been harnessed; while it doesn't run as wildly anymore, it is much steadier. For us, this means reduced risk, but the opportunity to multiply your investment 100 times overnight has also become less.
