While monitoring the market today, the group chat exploded—"How did USDT to RMB break below 7?" Some people panicked and started liquidating, while others remained eerily calm.

I replied directly: Are you here to trade USDT or to trade crypto? Didn’t the Ethereum you bought yesterday go up 10%? Why are you worrying about the exchange rate now?

But to be honest, USDT dropping below 7 this time is indeed rare. Many veterans say they haven't seen it this low in years. What's even more surreal is that USDT is dropping, but crypto prices are soaring—what's really happening behind the scenes?

# Two forces are pulling the market apart

**The Fed getting a new chair? Rate cut expectations fully reversed**

The news is basically confirmed: Trump is determined to replace Powell and install his confidant Hassett as Fed Chair. The goal is clear—aggressive rate cuts, whatever it takes.

How fast did the market react? The probability of a rate cut in December soared to nearly 90%, and another 50 basis point cut next year isn’t out of the question. Expectations for a weaker dollar are growing, and the RMB is under maximum pressure to appreciate. Exchange rate breaking 7? This might just be the beginning.

**Regulators crack down, stablecoin channels precisely targeted**

Recently, regulators have significantly intensified efforts to combat money laundering and illegal currency exchange using stablecoins. This punch hit the core of cross-border gray capital channels. Many were forced to sell USDT for safety, causing a short-term supply surge and naturally pushing the exchange rate down.

# The seemingly contradictory phenomenon: USDT falling, crypto rising?

This is the most interesting part. On the surface, it doesn’t make sense, but when you think about it, the logic is actually clear:

- **The expectation of a weaker dollar is public knowledge**: If the Fed really turns to aggressive rate cuts, global liquidity will open the floodgates again. Traditional capital can’t find an outlet, so crypto naturally becomes the catch basin.

- **Regulatory crackdowns have turned into a "positive"**: Some believe that clearing out gray channels is a long-term signal of industry health, which actually boosts institutional confidence to enter.

- **Market sentiment cycle is reversing**: As expectations improve and previous bullish pressure is released, the overall capital situation gets better. USDT’s price, as a fiat onramp indicator, sees its short-term volatility as a typical feature of early bull markets—look at historical data, every bull run started with USDT exchange rates under pressure like this.

# Newcomers are panicking, veterans are laughing

Faced with this wave of moves, the market’s response is extremely polarized:

**Newcomers:** "Is USDT collapsing? Should I get out?"

**Cycle veterans:** "This is how it is on the eve of a bull market, a drop in USDT is not a bad thing." Some are even calculating: buy a batch of USDT at these lows, and when the exchange rate returns to 7.5, swap back and easily pocket a 10% spread.

In the end, this game isn’t about technical skills, but about understanding the cycle and having a steady mindset. Do you see risk or opportunity right now?