Since October, the entire crypto has been struggling. Market trends have consistently disappointed. Have there been any major negative factors? No. Have the fundamentals changed drastically? No. Cryptocurrency prices that previously rose due to large inflows into ETFs are now plummeting due to large outflows. It seems like the market is undergoing changes we haven't yet witnessed, but a nagging feeling suggests something is amiss. So, based on publicly available information, I'll offer a hypothesis. Note that this is just a conjecture; I don't have access to high-priority information or a complete picture of the market. I can only attempt to piece together an overall logic from fragmented data.
Let's first review the key FUD (Fear, Uncertainty, and Doubt) lists from the recent market:
S&P downgraded USDT's stability assessment from level 4 to the lowest level, level 5 (Weak). This means that mainstream traditional financial institutions consider holding USDT to be extremely risky. Market rumors suggest that USDT has not strictly adhered to the rule of "only pegged to US Treasury bonds," with high-risk assets (corporate bonds, precious metals, etc.) accounting for up to 24%. Furthermore, due to the lack of transparent auditing and bank custody information, the market is concerned that it may experience a run on the bank or be frozen by regulators at any time. However, it's important to note that this information had already received considerable exposure and market discussion by July at the latest, during the Genius Bill and Circle's IPO, but this did not affect the new highs in September and October. Therefore, the themes were exploited; the facts remain unchanged, what has changed is sentiment and public opinion.
USDT is indeed popular due to its convenient settlement methods, widely used in legitimate trade at the Yiwu Small Commodities Market, gambling fraud in Southeast Asia, and drug trafficking in Venezuela. It's understandable that it's being targeted by the central bank and the "Thirteen Taibao" (a group of corrupt officials) in China due to tax and foreign exchange controls. If further tightening of controls, such as more frozen bank accounts, more money laundering cases, and even criminal prosecution, will indeed affect USDT's usage.
JPMorgan Chase announced that starting in January 2026, companies with excessive holdings of Bitcoin assets will be removed from the MSCI index. This directly impacts the business models of companies like MicroStrategy, forcing listed companies to choose between "obtaining passive funding through inclusion in mainstream indices" and "accumulating Bitcoin." This effectively closes the loophole allowing institutions to use US stock financing to buy cryptocurrencies with "unlimited ammunition."
Since September, seven tech giants, including Amazon, Google, Meta, and Oracle, have issued a staggering $90 billion in bonds, exceeding the total issued in the previous 40 months. While the US AI bubble is teetering on the brink of collapse, it continues to attract capital, leading venture capitalists to prefer "yielding bonds" or "physical gold" over "interest-free but high-risk Bitcoin." The massive investment in AI infrastructure is severely mismatched with the current meager AI revenue, foreshadowing a huge risk of capital waste and a potential bubble burst.
When the cryptocurrency and tech stock bubbles burst, the outflowing hot money naturally flowed into traditional safe-haven assets—gold and silver. Unlike before, the market no longer trusted "paper gold" and "paper silver," and began a frenzy of buying physical gold. Investors demanded physical delivery, causing a sharp drop in inventory (silver fell by 75%), directly exposing the leverage game in the futures market. Capital giants swept up all gold sell orders on the market, creating an extreme scenario where there were "only buy orders and no sell orders." The CME Group's decision to disconnect its trading platform further intensified market distrust.
Based on the information above, we can boldly hypothesize that this is a systemic suppression of new money by old money, a battle for liquidity, and a mass exodus under a survival crisis. Tech companies are no longer just making AI; they're starting to develop cloud computing finance, stablecoins, wallets, quasi-financial clearing layers, corporate financial services, and even becoming the "central bank of the data age." For old money, this is "establishing a separate central authority," a life-or-death situation that cannot be tolerated. But this is not merely a "siege"; more accurately, it's a meticulously planned "co-optation" and "purge." "Old money" (represented by sovereign states, central banks, Wall Street giants, and traditional financial magnates) does not aim to completely eliminate "new money" (represented by cryptocurrency giants and radical tech companies), but rather to strip new money of its "money-making power" and "pricing power," bringing it into its own ruling order.
What the old money can't tolerate most isn't your wealth, but your attempt to establish a financial system parallel to the dollar/fiat currency system. Supporting USDC is a way of suppressing and competing for the niche of non-compliant stablecoins like USDT. USDT effectively plays the role of a "shadow Federal Reserve," issuing dollar certificates without full regulation. S&P's downgrade of its rating and Yellen's description of it as a "minefield" essentially mean: "Only government-licensed institutions (banks) can print money; private companies cannot."
Therefore, this is an unrestricted battle between established and emerging forces in a liquidity-scarce environment, all vying to survive until the next cycle. The losers will become the winners' reserves for weathering the winter. Previously, old money ate the meat (traditional assets), while new money drank the soup (cryptocurrencies), and everyone coexisted peacefully. But now we've entered an era of zero-sum game; the soup is gone, and old money has discovered that new money has locked up trillions of dollars in liquidity. To survive, old money must break free from its long-held piggy bank. In this struggle, power will shift and transfer; old money will tamer the new money, and ultimately, the old and new will merge. The discomfort felt by retail investors is actually a normal stress response to drastic changes.
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