Suppose that the issuer of USDT suddenly encounters a problem, causing U to start to depreciate sharply, 1U=0.8USD, then how should people holding USDT respond?
Withdrawing funds for legal currency? It may be too late. The best way is to buy BTC, the only currency with value storage properties.
The US dollar is the U in the global financial system. The current 34 trillion US national debt cannot be repaid by relying on taxes. The only way is to devalue the dollar, lower the real interest rate, increase the number of dollars in circulation, and then control inflation in disguise while starting to release liquidity.
So what happens if this operation is done too obviously and too frequently?
For example, if Tether creates a lot of U out of thin air all day long and uses them to buy BTC, will you still trust USDT?
Therefore, not only financial institutions have begun to no longer trust the value of the US dollar, but central banks of various countries have also begun to no longer trust the future value of the US dollar. However, it should be noted that what central banks of various countries trust even less is non-US currencies. The increasingly serious geopolitical crisis in the next five years will cause fiat currency to gradually lose its purchasing power. After all, when war comes, fiat currency is just a piece of paper and a string of numbers.
Therefore, the essential reason for buying gold is the decline in trust in the US dollar, and the reason why the US dollar has not depreciated significantly is the decline in global trust in fiat currencies. To put it bluntly, although they are competing to be worse, it seems that most fiat currencies are worse than the US dollar, and central banks have no choice but to buy gold.
At this critical juncture, the BTC ETF was approved by the United States. It is hard to say whether this is a big move. $BTC
