The crypto community has been in an uproar these past couple of days—USDT’s exchange rate has dropped below 7, and a lot of people are starting to panic.

At the same time, ETH surged 10% in a single day, and the entire crypto market is riding a wave of optimism. Is this contradictory? On the surface, it seems odd, but if you dig deeper, it’s actually the result of two opposing forces at play.

**First Variable: Drastic Shift in Fed Policy Expectations**

Rumors are circulating that there may be a personnel change at the Federal Reserve, with the potential new appointee favoring a more aggressive monetary easing. The data is already reflecting this expectation: the probability of a rate cut in December is nearing 90%, and markets are betting on at least a 50 basis point cut next year. The dollar weakening is almost a certainty, the RMB will appreciate passively, and downward pressure on USDT’s price is only to be expected.

**Second Variable: Crackdown on Stablecoin Channels**

Recently, there’s been a significant increase in crackdowns on illegal USDT currency exchange and money laundering. These gray channels for cross-border capital flows are being cut off, forcing many to sell USDT and avoid risk, leading to a short-term surge in supply and, naturally, a drop in the exchange rate.

**Why is USDT falling while crypto is rising?**

This is the key question. Once expectations of a depreciating dollar take hold, global capital will look for new safe havens and opportunities for appreciation—crypto assets are one of those. While regulatory crackdowns cause short-term volatility, in the long run they actually help clean up the market and pave the way for compliant capital to enter.

Historically, every time a bull market begins, stablecoin exchange rates experience short-term pressure—this is often a precursor to a shift in sentiment, not a sign of collapse.

**Two Mindsets, Two Outcomes**

Newcomers focus anxiously on exchange rate fluctuations, while veterans are already calculating arbitrage opportunities: buy USDT at 7.0 now, and when it returns to 7.5, swap back for a theoretical 10% profit.

The logic of the market has changed. Are you still obsessing over the exchange rate, or are you seeing the trend and preparing to position yourself? Share your judgment in the comments: Will USDT keep dropping, or rebound soon?