The trend of this rate cut will determine the true definition of cryptocurrency. No matter how many opinions there are in the market, such as "BTC is the real decentralized currency of the future and will rise sharply", "or BTC is becoming a centralized currency", after this rate cut, the facts will prove what cryptocurrency is now. To analyze what cryptocurrency is now, we must first study the impact of the rate cut on the cryptocurrency industry. The first thing is to analyze the exchange rate of stablecoins. To analyze the impact of the US interest rate cut on the USDT-RMB exchange rate, we first need to understand several important economic factors and the dynamic relationship between the US dollar, RMB and USDT.
1. The impact of US interest rate cuts on the US dollar
A U.S. interest rate cut usually leads to a weaker U.S. dollar, as lower interest rates reduce the attractiveness of U.S. dollar assets and capital may flow out of U.S. dollar-denominated assets, leading to a depreciation of the U.S. dollar. Therefore, after a rate cut, the exchange rate of the U.S. dollar relative to other currencies (such as the RMB) may fall.
2. The relationship between USDT and the US dollar
USDT is a stablecoin pegged to the US dollar. In theory, its value should be pegged to the US dollar at a 1:1 ratio. However, in the real market, the price of USDT may be affected by factors such as supply and demand, market sentiment, and liquidity, and may fluctuate slightly in the short term. In addition, USDT has wide circulation in the cryptocurrency market, and its demand may also affect its price.
3. Potential impact of US interest rate cuts on the USDT-RMB exchange rate
The depreciation of the US dollar has led to a decline in the USDT-RMB exchange rate:
Since USDT is anchored to the US dollar, if the US interest rate cut causes the US dollar to depreciate, the USDT exchange rate against the RMB may also fall.
USDT demand impact:
Although USDT is theoretically pegged to the U.S. dollar, demand for USDT may rise under certain market conditions, especially when the cryptocurrency market is volatile or investors seek safe-haven assets. Interest rate cuts may push investors to seek more risky assets, including cryptocurrencies, and USDT, as the main circulating currency in the crypto market, may see an increase in demand, thereby supporting its exchange rate against the RMB.
4. Analysis of recent trend of USDT to RMB exchange rate
If the Federal Reserve cuts interest rates significantly and the US dollar weakens, the USDT to RMB exchange rate may have the following changes in the short term:
The dollar weakens and the USDT exchange rate falls: the depreciation of the US dollar leads to a fall in the exchange rate. In theory, USDT will weaken along with the US dollar.
Market risk aversion drives up demand for USDT: Even if the U.S. dollar weakens, market uncertainties (such as financial market volatility and global economic instability) may lead to an increase in risk aversion demand for USDT, supporting its exchange rate and even pushing up its price against the RMB.
5. The relationship between cryptocurrencies and the US dollar
If we observe that USDT demand rises and its exchange rate against RMB rises when the US dollar depreciates, this indicates that the market investors' demand for USDT and cryptocurrencies has not decreased due to the weakening of the US dollar. Cryptocurrencies and the US dollar may show an anti-correlation characteristic, that is, when the US dollar is weak, the demand for cryptocurrencies increases, and vice versa.
Anti-correlation:
For example, if a weaker dollar leads to capital inflows into crypto markets, pushing up the prices of crypto assets, then it can be argued that there is some degree of inverse correlation between cryptocurrencies and the dollar.
Other considerations:
It is important to consider how different crypto assets behave in response to market volatility. Major cryptocurrencies such as Bitcoin and Ethereum may have a low correlation with the U.S. dollar, while other smaller, riskier cryptocurrencies may be more driven by market sentiment.
in conclusion
The US interest rate cut policy may weaken the US dollar and cause the USDT exchange rate to fall in the short term. However, changes in the demand for USDT (especially the flow of funds in the cryptocurrency market) will also affect its exchange rate, and the USDT exchange rate to the RMB may rise instead of fall in the short term. This shows that the relationship between cryptocurrencies and the US dollar may have a certain inverse correlation. When the US dollar weakens, the activity of the cryptocurrency market may increase, thereby driving an increase in the demand for USDT. From the current perspective, whether cryptocurrencies are "tech stocks" or digital gold still needs to wait for the market reaction after the interest rate cut to give a real definition.
