Why Has the Supply of USDT and FDUSD Decreased Instead of Increased?
In recent times, rather than printing more Tether (USDT) and FDUSD, the supply of these stablecoins has been decreased. This comes as a surprise, especially when contrasted with the usual trend of increasing supply during bullish phases or market expansions. Additionally, The Federal Reserve (Fed) has opted not to raise interest rates but has instead reduced them by 0.5%. While some might speculate that this move is designed to harm Donald Trump's political campaign, the actual motive appears to be rooted in broader financial and economic strategies.
Strategic Market Maneuvering: Bitcoin and SHIB Acquisition
The reduction in USDT and FDUSD supply, coupled with the Fedâs rate cut, is more about maintaining lower Bitcoin prices during the bear market. By doing this, institutions and governmentsâparticularly the U.S.âcan acquire as much Bitcoin and SHIB tokens as possible. In a landscape where digital assets are becoming increasingly important, the U.S. is vying to surpass China in Bitcoin accumulation.
China, particularly its billionaire class, remains a key player in the crypto race. While China leads in various global financial sectors, its billionaires are particularly active in the Bitcoin space, further motivating the U.S. to catch up in the crypto accumulation race.
Investment Strategy During Market Volatility
For retail investors looking to invest in Bitcoin or other cryptocurrencies, itâs essential to approach the market cautiously, especially in volatile times like these. An important consideration is portfolio management. For instance, if you have $200 for investment, itâs wise to allocate only $100 towards crypto, while keeping the other $100 aside for future opportunities or non-crypto-related activities.
When it comes to the $100 allocation in crypto, consider diversifying wisely:
70% in Bitcoin: Bitcoin remains the most stable and widely recognized cryptocurrency.
20% in Ethereum and Solana: Ethereum is a leader in the decentralized application space, while Solana offers a promising alternative blockchain ecosystem.
10% in Low-Priced Tokens (LPTs): For higher-risk, higher-reward investments, allocate a smaller portion of your portfolio to tokens like SHIB, BONK, PEPE, LUNC, FLOKI, and WIN. These may offer substantial returns during bullish phases, but they also carry significant risk.
SUMMARY
The recent reduction in USDT and FDUSD, along with the Fed's decision to lower interest rates, highlights the strategic efforts by the U.S. to acquire Bitcoin at a lower cost, positioning itself competitively against China in the global digital asset market. For individual investors, the key is to remain cautious and strategic in portfolio allocation to avoid overexposure to market volatility. Proper diversification between high-cap cryptocurrencies and riskier, lower-priced tokens is critical for long-term success in the crypto space.
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