Is USDT's Throne as the "King of Stablecoins" Still Secure?

In the cryptocurrency market, USDT (Tether) has long been the uncontested "King of Stablecoins." With a market capitalization exceeding $140 billion and a dominant share of over 60% of the global stablecoin market, it serves as the core liquidity tool for exchanges, DeFi protocols, and cross-border payments.

However, as regulatory scrutiny intensifies, concerns over reserve transparency persist, and compliant stablecoins like USDC and DAI rise in prominence, USDT's dominant position is facing unprecedented challenges.

Over the past few years, USDT has weathered multiple crises: In 2018, its reserves were briefly frozen, causing it to deviate from its peg to $0.95. In 2022, the Terra collapse triggered panic selling in the market. In 2023, a bank run led to delayed redemptions... Yet each time, it miraculously "survived," and its market share not only remained stable but actually increased.

This "phoenix-like" resilience has left many investors both reliant on and skeptical of USDT—Is USDT truly safe? Or is its risk accumulating, just waiting to explode?

Today, the advancement of the GENIUS Act in the United States, stricter global regulatory reviews of stablecoins, and the potential volatility of Tether's Bitcoin holdings (around $7.86 billion) all cast uncertainty over USDT's future. Meanwhile, competitors like USDC and DAI are accelerating their market capture, and some exchanges are even reducing USDT trading pairs.

We will neither blindly criticize USDT nor naively praise its "irreplaceability." Instead, based on data, regulatory dynamics, and market logic, we will address several key questions:

Why has USDT always been able to "turn danger into safety"? What is its moat?

Will the GENIUS Act truly "kill" USDT, or does Tether still have a strategy to cope?

If BTC crashes, will USDT's reserves remain safe?

Can competitors like USDC and DAI truly shake USDT's position?

How should ordinary investors manage the potential risks of USDT?

Whether you are a long-term holder of USDT, a policy observer following regulatory trends, or a cautious investor seeking safer stablecoin alternatives, this article will provide objective analysis and actionable strategies—not to create panic, but to help you make wiser decisions in a changing market.

Consultation: Real-World-Assets

Is the Myth of Indestructibility a Market Dependency or a Last Hurrah Before the Crisis?

In the world of cryptocurrency, USDT is like a cockroach that cannot be killed. Each time the market predicts its collapse, it miraculously bounces back to full health.

The 2018 bank account freeze caused it to briefly deviate from its peg to $0.95, the 2022 Terra collapse triggered panic selling in the market, and the 2023 bank run led to redemption delays... These crises that would have destroyed an ordinary project were like minor scratches to USDT.

This almost eerie survival ability has led the market to form an almost superstitious dependency on USDT.

Upon closer examination, it becomes clear that USDT's resilience is not a coincidence.

As one of the earliest stablecoins, USDT has become deeply embedded in the capillaries of the cryptocurrency market. Over 70% of global Bitcoin transactions are denominated in USDT, the vast majority of exchanges use it as a base trading pair, and DeFi protocols regard it as the most important source of liquidity.

This ubiquitous market penetration has created USDT's unique "too big to fail" attribute. Even in the most severe crisis moments, the market spontaneously forms an unspoken agreement: to let USDT survive, because no one wants to bear the cost of its collapse.

However, behind this dependency lies a disturbing truth.

Tether's long-standing opaque operations are like an elephant in the room—everyone sees it but chooses to ignore it. From the early debunking of the "1:1 dollar reserve" promise, to the later admission of holding commercial paper and Bitcoin as part of its reserves, to the recently exposed connections with Chinese corporate debt...

Each piece of information disclosure reminds us that USDT's stability is not built on an unbreakable foundation, but rather on a fragile balance maintained by collective market hypnosis.

Ironically, this opacity has become USDT's alternative advantage.

In the regulatory gray area, Tether can provide "conveniences" that compliant stablecoins cannot match. It offers 24/7 dollar liquidity to exchanges, builds bridges for cross-border payments in regulatory blind spots, and even serves as a tool for some regions to circumvent capital controls.

These "special needs" have created USDT's unique market niche, which is the fundamental reason why "well-behaved" stablecoins like USDC find it difficult to shake its position.

However, historical experience tells us that all market miracles built on ambiguous ground will eventually face a reckoning.

As the GENIUS Act advances and global regulators increase their scrutiny of stablecoins, USDT's long-relied-upon survival space is being gradually compressed. Exchanges and institutions that once turned a blind eye to Tether now have to start considering strategies for a "post-USDT era."

The market's ambivalent attitude towards USDT is like that of an addict who knows he is drinking poison but cannot quit. We depend on its liquidity, yet worry about its opacity; we enjoy the convenience it brings, yet fear waking up one day to find it has collapsed.

This collective cognitive dissonance may be the most accurate portrayal of USDT—it is not an irreplaceable myth, but a product of a specific historical stage, destined to face the test of time.

The Regulatory Storm Strikes: Is USDT's "American Dream" Shattering?

When the political machinery in Washington begins to turn, even the most stubborn fortress in the cryptocurrency world starts to waver.

The GENIUS Act hangs like a sword of Damocles over all non-compliant stablecoins, with the $100 billion market cap USDT being the first in the line of fire. The most lethal aspect of this act is not its punitive measures, but its precise targeting of Tether's most vulnerable weak link—those ambiguous reserve assets.

Looking at Tether's latest reserve report, one finds an intriguing figure: 12.18% of its assets are broadly categorized as "other investments." This means nearly $17 billion worth of assets are in the regulatory gray area, potentially being corporate bonds, Bitcoin holdings, or even some unknown financial derivatives.

These numbers are like a Rorschach inkblot test in the financial world, where everyone can see their worst fears. The GENIUS Act's requirement for 100% high-liquidity asset reserves is essentially a death sentence for such ambiguous operations.

The U.S. market is a tough nut to crack for USDT.

Although Tether has ostensibly excluded American users, through layers of exchanges and market makers, a significant amount of USDT still circulates among U.S. investors. This "roundabout" strategy might have worked during a period of lax regulation, but in the current political climate, it is as naive as trying to smuggle liquids through airport security.

Recent in-depth collaborations between Circle and Coinbase, and BlackRock's ambitions in tokenized funds, all hint at a harsh reality: Wall Street is preparing for a "post-USDT era."

More intriguing is the regulatory authorities' "boiling frog" strategy.

Instead of outright banning USDT, they are applying pressure through banking channels, demanding that financial institutions cut off business dealings with Tether. This "financial strangulation" tactic is more lethal than direct regulatory crackdowns, like slowly tightening an oxygen valve, allowing the prey to lose vitality without realizing it.

Last year, when several banks suddenly terminated their cooperation with cryptocurrency companies, it sounded the first alarm.

However, Tether is not a passive lamb waiting to be slaughtered. Their recent frequent cooperation with law enforcement to freeze illicit funds is akin to a ship seeking a safe harbor before a storm.

From the Cambodia-based Huiwang Group to wallets related to the Ukraine war, Tether is actively demonstrating its "utility value" to regulators. This survival instinct is reminiscent of gangsters in movies who hand over a few underlings to the police before a crackdown in order to protect themselves.

A global regulatory encirclement is taking shape. The EU's MiCA regulations, Japan's strict scrutiny, and Singapore's cautious stance are all compressing USDT's room for survival. Offshore financial centers that once turned a blind eye to cryptocurrencies are now demanding Tether to provide complete reserve proofs.

It is like a carefully arranged set of dominoes, with the first tile already pushed over at a U.S. congressional hearing.

Ironically, USDT's biggest enemy may not be the regulators, but the slow erosion of market confidence. Like a frog in warm water that doesn't notice the temperature change, investors' wariness towards USDT is gradually worn down in daily transactions.

But when the tipping point arrives, everyone will witness what a true "bank run 2.0" looks like. At that time, whether Tether's carefully constructed reserve system can withstand the test will become the most expensive stress test in cryptocurrency history.

The Reserve Reality: Tether's Bitcoin Gamble and the Fragile Game of Trust

Looking at Tether's balance sheet, the most eye-catching figure is not the neatly arranged numbers of U.S. Treasury bonds, but that glaring 5.47%—a Bitcoin position worth nearly $8 billion.

This number is like a ticking time bomb, quietly lying in Tether's financial statements, waiting for the market's judgment. When Bitcoin prices soar, it is a profit booster; but when the market turns, it can become the last straw that breaks the camel's back.

Tether's investment in Bitcoin is a sophisticated financial magic trick. They use their own issued stablecoins to buy Bitcoin, and then use these Bitcoins as collateral to support the issuance of more stablecoins. This circular logic is like a financial version of the Möbius strip, with no beginning or end.

This operation is a genius design in a bull market, but a recipe for disaster in a bear market. Imagine when Bitcoin prices plummet, Tether's reserve value will shrink proportionally, while the market's redemption pressure on USDT will multiply—this is the classic death spiral model.

Tether has been playing the reserve transparency game for a full decade. From the initial confident "1:1 dollar reserve," to the later admission of commercial paper, and now the ambiguous "other investments," each information disclosure is like a carefully designed striptease, meeting the minimum regulatory requirements while retaining enough mystery.

The latest financial report shows that in addition to Bitcoin, over 12% of the assets are categorized as "other investments," a figure that would keep any auditor awake at night.

More unsettling is the corporate bond portfolio in Tether's reserves.

During prosperous economic times, these bonds are tools for increasing yield; but in a high-interest-rate environment, they become synonyms for liquidity traps. When the market demands Tether to cash in redemptions, these bonds may face the embarrassment of being sold at "fire sale" prices.

Like the mortgage-backed securities held by Lehman Brothers in 2008, they had attractive ratings in peaceful times, but became worthless waste paper when the crisis struck.

Tether's audit reports read like postmodernist novels—each number is real, but the combination is perplexing. The carefully designed accounting classifications, the implicit related-party transactions, and the always-late information disclosures together constitute the largest "game of trust" in the cryptocurrency world.

The market's acceptance of USDT is not because it believes in its reserves, but because there are no better alternatives.

The subtle relationship between Bitcoin prices and USDT stability forms the most paradoxical dilemma in the cryptocurrency market. When Bitcoin rises, Tether's reserve value increases, making USDT seem safer; but when Bitcoin falls, the stability of USDT is put to a greater test.

This mutually causal cycle makes the entire system like a castle built on quicksand, seemingly magnificent but actually fraught with danger.

Tether's business model is essentially a race against time. They are betting that they can build a sufficiently large ecosystem to make USDT "too big to fail" before the market loses patience.

But history tells us that all institutions that considered themselves "too big to fail" eventually fell under the dual blows of regulation and market confidence. Lehman Brothers in 2008 and FTX in 2022 are prime examples.

In this game of trust, ordinary investors are like tourists in a casino, knowing that the house might be cheating but still忍不住要下注。Because in this crazy digital currency casino, USDT remains the most convenient tool for exchanging chips. But everyone knows: when the music stops, the one left holding USDT may pay the heaviest price.

The Ambition of Alternatives: Can USDC and DAI End the USDT Era?

In the cryptocurrency arena, USDC and DAI are like two challengers with distinct styles—one dressed in a tailored suit with compliance documents in hand, the other wearing a code battle robe and shouting the slogan of decentralization.

They have long coveted USDT's throne, yet always fall short of that final step. This stablecoin "Three Kingdoms" battle is playing out the most thrilling script of power transition in the digital currency world.

Behind USDC stands the old Wall Street faces—Circle and Coinbase.

This golden duo has branded USDC as the "good student," releasing audit reports on schedule every quarter, with reserve assets consisting solely of U.S. Treasury bonds and cash. With the tailwind of the GENIUS Act, USDC seems to hold the winning cards, but the market's reaction is always somewhat politely lukewarm.

It's like the top student in class who gets A's in every subject; everyone acknowledges their excellence, but in private trades, people still prefer the "bad boy" USDT who knows how to take shortcuts.

DAI, on the other hand, takes a completely different path. This stablecoin created by a code-governed organization has written the belief in decentralization into every line of its smart contracts.

It doesn't court regulators, nor does it deign to cozy up to traditional finance. Instead, it relies on the hardcore model of over-collateralization with ETH to amass a loyal following among crypto natives. But when ETH prices fluctuate wildly, DAI holders always unconsciously hold their breath, fearing the next second they might hear the shrill alarm of liquidation.

Reality has taught these challengers a cruel lesson: in the dog-eat-dog jungle of cryptocurrency, compliance and decentralization are important, but liquidity and user habits are the real hard currencies.

Currently, the number of USDT trading pairs on global exchanges is five times that of USDC and twenty times that of DAI. This gap cannot be bridged by a few impressive audit reports, just as even the most environmentally friendly new energy vehicles cannot replace the ubiquitous network of gas stations.

Tether knows the unspoken rules of this market well.

While USDC flaunts its compliance badge, USDT has quietly infiltrated every regulatory gray area; while DAI indulges in its decentralized temple, USDT has long become buddies with major exchanges. This down-to-earth survival wisdom has made USDT stronger after each crisis, like the Hydra in Greek mythology, which grows two heads for every one that is cut off.

But historical turning points often occur inadvertently.

As institutional investors flood into the market, Wall Street's demand for "clean" stablecoins is quietly changing the rules of the game. BlackRock's dollar institutional digital liquidity platform choosing to partner with USDC, and Visa piloting USDC settlements, all hint that when traditional financial giants truly enter the field, they prefer stablecoins with compliance teeth.

DAI faces a more philosophical dilemma. In order to expand its scale, it has to introduce more centralized assets as collateral, a compromise that makes it gradually lose its luster in the eyes of decentralization purists.

It's like an idealistic youth who, after entering middle age, has to bow to the pressure of making a living. Although their wallet is fuller, the light in their eyes dims.

The ultimate arbiter of this stablecoin battle is actually the silent despot of market habits. Exchanges are reluctant to add new trading pairs, market makers are unwilling to provide additional liquidity, and ordinary users do not want to change their usage habits— these invisible resistances form USDT's most solid moat. To overthrow a giant that occupies 60% of the market share, it takes not only a better product but also a complete revolution in user habits.

The current contest resembles the browser wars of the past. Everyone knew that Internet Explorer was riddled with vulnerabilities, but it still dominated the market for more than a decade thanks to its bundling with the Windows system. It wasn't until Chrome emerged with a revolutionary experience that history was rewritten.

USDT's challengers are waiting for their "Chrome moment," but the question is: in this instant-gratification cryptocurrency world, how much patience will the market give them?

Investors' Survival Law: Finding Dawn in USDT's Dusk

When the storm comes, smart seagulls do not argue about when the dark clouds will disperse, but adjust the angle of their wings and continue to soar.

Facing USDT's uncertain future, investors need not a gambler's mentality of taking sides, but the risk sense of an old sailor. In this stablecoin upheaval, the real winners will be those who engrave "risk aversion" into their investment DNA.

The market never announces the arrival of a crisis with fanfare.

USDT's risk signals are often hidden in corners that are easily overlooked: a certain exchange suddenly reduces USDT trading pairs, a market maker quietly lowers the quote depth, or a vague footnote change in Tether's financial report. These subtle fluctuations are like electromagnetic wave anomalies before an earthquake, and only the most vigilant observers can capture the danger signals.

Diversifying positions is not a cowardly risk-avoidance strategy, but the wisdom of those who have experienced market vicissitudes.

Reasonably allocating stablecoin assets between USDT, USDC, and DAI is like putting eggs in different baskets before a storm. This strategy may seem to give up some liquidity returns, but it can protect the most important principal when a black swan event occurs.

Those investors who were fully invested in UST during the LUNA collapse best understand the painful lesson of "not mistaking faith for risk management."

The market's cruelest joke is that crises always arrive when everyone lets their guard down.

When USDT maintains a perfect peg for several months in a row, and social media is filled with the argument that "Tether is too big to fail," that is often the moment to be most vigilant. Mature investors are like antelopes on the savannah

Is USDT's Throne as the "King of Stablecoins" Still Secure?

In the cryptocurrency market, USDT (Tether) has long been the uncontested "King of Stablecoins." With a market capitalization exceeding $140 billion and a dominant share of over 60% of the global stablecoin market, it serves as the core liquidity tool for exchanges, DeFi protocols, and cross-border payments.

However, as regulatory scrutiny intensifies, concerns over reserve transparency persist, and compliant stablecoins like USDC and DAI rise in prominence, USDT's dominant position is facing unprecedented challenges.

Over the past few years, USDT has weathered multiple crises: In 2018, its reserves were briefly frozen, causing it to deviate from its peg to $0.95. In 2022, the Terra collapse triggered panic selling in the market. In 2023, a bank run led to delayed redemptions... Yet each time, it miraculously "survived," and its market share not only remained stable but actually increased.

This "phoenix-like" resilience has left many investors both reliant on and skeptical of USDT—Is USDT truly safe? Or is its risk accumulating, just waiting to explode?

Today, the advancement of the GENIUS Act in the United States, stricter global regulatory reviews of stablecoins, and the potential volatility of Tether's Bitcoin holdings (around $7.86 billion) all cast uncertainty over USDT's future. Meanwhile, competitors like USDC and DAI are accelerating their market capture, and some exchanges are even reducing USDT trading pairs.

We will neither blindly criticize USDT nor naively praise its "irreplaceability." Instead, based on data, regulatory dynamics, and market logic, we will address several key questions:

Why has USDT always been able to "turn danger into safety"? What is its moat?

Will the GENIUS Act truly "kill" USDT, or does Tether still have a strategy to cope?

If BTC crashes, will USDT's reserves remain safe?

Can competitors like USDC and DAI truly shake USDT's position?

How should ordinary investors manage the potential risks of USDT?

Whether you are a long-term holder of USDT, a policy observer following regulatory trends, or a cautious investor seeking safer stablecoin alternatives, this article will provide objective analysis and actionable strategies—not to create panic, but to help you make wiser decisions in a changing market.

Consultation: Real-World-Assets

Is the Myth of Indestructibility a Market Dependency or a Last Hurrah Before the Crisis?

In the world of cryptocurrency, USDT is like a cockroach that cannot be killed. Each time the market predicts its collapse, it miraculously bounces back to full health.

The 2018 bank account freeze caused it to briefly deviate from its peg to $0.95, the 2022 Terra collapse triggered panic selling in the market, and the 2023 bank run led to redemption delays... These crises that would have destroyed an ordinary project were like minor scratches to USDT.

This almost eerie survival ability has led the market to form an almost superstitious dependency on USDT.

Upon closer examination, it becomes clear that USDT's resilience is not a coincidence.

As one of the earliest stablecoins, USDT has become deeply embedded in the capillaries of the cryptocurrency market. Over 70% of global Bitcoin transactions are denominated in USDT, the vast majority of exchanges use it as a base trading pair, and DeFi protocols regard it as the most important source of liquidity.

This ubiquitous market penetration has created USDT's unique "too big to fail" attribute. Even in the most severe crisis moments, the market spontaneously forms an unspoken agreement: to let USDT survive, because no one wants to bear the cost of its collapse.

However, behind this dependency lies a disturbing truth.

Tether's long-standing opaque operations are like an elephant in the room—everyone sees it but chooses to ignore it. From the early debunking of the "1:1 dollar reserve" promise, to the later admission of holding commercial paper and Bitcoin as part of its reserves, to the recently exposed connections with Chinese corporate debt...

Each piece of information disclosure reminds us that USDT's stability is not built on an unbreakable foundation, but rather on a fragile balance maintained by collective market hypnosis.

Ironically, this opacity has become USDT's alternative advantage.

In the regulatory gray area, Tether can provide "conveniences" that compliant stablecoins cannot match. It offers 24/7 dollar liquidity to exchanges, builds bridges for cross-border payments in regulatory blind spots, and even serves as a tool for some regions to circumvent capital controls.

These "special needs" have created USDT's unique market niche, which is the fundamental reason why "well-behaved" stablecoins like USDC find it difficult to shake its position.

However, historical experience tells us that all market miracles built on ambiguous ground will eventually face a reckoning.

As the GENIUS Act advances and global regulators increase their scrutiny of stablecoins, USDT's long-relied-upon survival space is being gradually compressed. Exchanges and institutions that once turned a blind eye to Tether now have to start considering strategies for a "post-USDT era."

The market's ambivalent attitude towards USDT is like that of an addict who knows he is drinking poison but cannot quit. We depend on its liquidity, yet worry about its opacity; we enjoy the convenience it brings, yet fear waking up one day to find it has collapsed.

This collective cognitive dissonance may be the most accurate portrayal of USDT—it is not an irreplaceable myth, but a product of a specific historical stage, destined to face the test of time.

The Regulatory Storm Strikes: Is USDT's "American Dream" Shattering?

When the political machinery in Washington begins to turn, even the most stubborn fortress in the cryptocurrency world starts to waver.

The GENIUS Act hangs like a sword of Damocles over all non-compliant stablecoins, with the $100 billion market cap USDT being the first in the line of fire. The most lethal aspect of this act is not its punitive measures, but its precise targeting of Tether's most vulnerable weak link—those ambiguous reserve assets.

Looking at Tether's latest reserve report, one finds an intriguing figure: 12.18% of its assets are broadly categorized as "other investments." This means nearly $17 billion worth of assets are in the regulatory gray area, potentially being corporate bonds, Bitcoin holdings, or even some unknown financial derivatives.

These numbers are like a Rorschach inkblot test in the financial world, where everyone can see their worst fears. The GENIUS Act's requirement for 100% high-liquidity asset reserves is essentially a death sentence for such ambiguous operations.

The U.S. market is a tough nut to crack for USDT.

Although Tether has ostensibly excluded American users, through layers of exchanges and market makers, a significant amount of USDT still circulates among U.S. investors. This "roundabout" strategy might have worked during a period of lax regulation, but in the current political climate, it is as naive as trying to smuggle liquids through airport security.

Recent in-depth collaborations between Circle and Coinbase, and BlackRock's ambitions in tokenized funds, all hint at a harsh reality: Wall Street is preparing for a "post-USDT era."

More intriguing is the regulatory authorities' "boiling frog" strategy.

Instead of outright banning USDT, they are applying pressure through banking channels, demanding that financial institutions cut off business dealings with Tether. This "financial strangulation" tactic is more lethal than direct regulatory crackdowns, like slowly tightening an oxygen valve, allowing the prey to lose vitality without realizing it.

Last year, when several banks suddenly terminated their cooperation with cryptocurrency companies, it sounded the first alarm.

However, Tether is not a passive lamb waiting to be slaughtered. Their recent frequent cooperation with law enforcement to freeze illicit funds is akin to a ship seeking a safe harbor before a storm.

From the Cambodia-based Huiwang Group to wallets related to the Ukraine war, Tether is actively demonstrating its "utility value" to regulators. This survival instinct is reminiscent of gangsters in movies who hand over a few underlings to the police before a crackdown in order to protect themselves.

A global regulatory encirclement is taking shape. The EU's MiCA regulations, Japan's strict scrutiny, and Singapore's cautious stance are all compressing USDT's room for survival. Offshore financial centers that once turned a blind eye to cryptocurrencies are now demanding Tether to provide complete reserve proofs.

It is like a carefully arranged set of dominoes, with the first tile already pushed over at a U.S. congressional hearing.

Ironically, USDT's biggest enemy may not be the regulators, but the slow erosion of market confidence. Like a frog in warm water that doesn't notice the temperature change, investors' wariness towards USDT is gradually worn down in daily transactions.

But when the tipping point arrives, everyone will witness what a true "bank run 2.0" looks like. At that time, whether Tether's carefully constructed reserve system can withstand the test will become the most expensive stress test in cryptocurrency history.

The Reserve Reality: Tether's Bitcoin Gamble and the Fragile Game of Trust

Looking at Tether's balance sheet, the most eye-catching figure is not the neatly arranged numbers of U.S. Treasury bonds, but that glaring 5.47%—a Bitcoin position worth nearly $8 billion.

This number is like a ticking time bomb, quietly lying in Tether's financial statements, waiting for the market's judgment. When Bitcoin prices soar, it is a profit booster; but when the market turns, it can become the last straw that breaks the camel's back.

Tether's investment in Bitcoin is a sophisticated financial magic trick. They use their own issued stablecoins to buy Bitcoin, and then use these Bitcoins as collateral to support the issuance of more stablecoins. This circular logic is like a financial version of the Möbius strip, with no beginning or end.

This operation is a genius design in a bull market, but a recipe for disaster in a bear market. Imagine when Bitcoin prices plummet, Tether's reserve value will shrink proportionally, while the market's redemption pressure on USDT will multiply—this is the classic death spiral model.

Tether has been playing the reserve transparency game for a full decade. From the initial confident "1:1 dollar reserve," to the later admission of commercial paper, and now the ambiguous "other investments," each information disclosure is like a carefully designed striptease, meeting the minimum regulatory requirements while retaining enough mystery.

The latest financial report shows that in addition to Bitcoin, over 12% of the assets are categorized as "other investments," a figure that would keep any auditor awake at night.

More unsettling is the corporate bond portfolio in Tether's reserves.

During prosperous economic times, these bonds are tools for increasing yield; but in a high-interest-rate environment, they become synonyms for liquidity traps. When the market demands Tether to cash in redemptions, these bonds may face the embarrassment of being sold at "fire sale" prices.

Like the mortgage-backed securities held by Lehman Brothers in 2008, they had attractive ratings in peaceful times, but became worthless waste paper when the crisis struck.

Tether's audit reports read like postmodernist novels—each number is real, but the combination is perplexing. The carefully designed accounting classifications, the implicit related-party transactions, and the always-late information disclosures together constitute the largest "game of trust" in the cryptocurrency world.

The market's acceptance of USDT is not because it believes in its reserves, but because there are no better alternatives.

The subtle relationship between Bitcoin prices and USDT stability forms the most paradoxical dilemma in the cryptocurrency market. When Bitcoin rises, Tether's reserve value increases, making USDT seem safer; but when Bitcoin falls, the stability of USDT is put to a greater test.

This mutually causal cycle makes the entire system like a castle built on quicksand, seemingly magnificent but actually fraught with danger.

Tether's business model is essentially a race against time. They are betting that they can build a sufficiently large ecosystem to make USDT "too big to fail" before the market loses patience.

But history tells us that all institutions that considered themselves "too big to fail" eventually fell under the dual blows of regulation and market confidence. Lehman Brothers in 2008 and FTX in 2022 are prime examples.

In this game of trust, ordinary investors are like tourists in a casino, knowing that the house might be cheating but still忍不住要下注。Because in this crazy digital currency casino, USDT remains the most convenient tool for exchanging chips. But everyone knows: when the music stops, the one left holding USDT may pay the heaviest price.

The Ambition of Alternatives: Can USDC and DAI End the USDT Era?

In the cryptocurrency arena, USDC and DAI are like two challengers with distinct styles—one dressed in a tailored suit with compliance documents in hand, the other wearing a code battle robe and shouting the slogan of decentralization.

They have long coveted USDT's throne, yet always fall short of that final step. This stablecoin "Three Kingdoms" battle is playing out the most thrilling script of power transition in the digital currency world.

Behind USDC stands the old Wall Street faces—Circle and Coinbase.

This golden duo has branded USDC as the "good student," releasing audit reports on schedule every quarter, with reserve assets consisting solely of U.S. Treasury bonds and cash. With the tailwind of the GENIUS Act, USDC seems to hold the winning cards, but the market's reaction is always somewhat politely lukewarm.

It's like the top student in class who gets A's in every subject; everyone acknowledges their excellence, but in private trades, people still prefer the "bad boy" USDT who knows how to take shortcuts.

DAI, on the other hand, takes a completely different path. This stablecoin created by a code-governed organization has written the belief in decentralization into every line of its smart contracts.

It doesn't court regulators, nor does it deign to cozy up to traditional finance. Instead, it relies on the hardcore model of over-collateralization with ETH to amass a loyal following among crypto natives. But when ETH prices fluctuate wildly, DAI holders always unconsciously hold their breath, fearing the next second they might hear the shrill alarm of liquidation.

Reality has taught these challengers a cruel lesson: in the dog-eat-dog jungle of cryptocurrency, compliance and decentralization are important, but liquidity and user habits are the real hard currencies.

Currently, the number of USDT trading pairs on global exchanges is five times that of USDC and twenty times that of DAI. This gap cannot be bridged by a few impressive audit reports, just as even the most environmentally friendly new energy vehicles cannot replace the ubiquitous network of gas stations.

Tether knows the unspoken rules of this market well.

While USDC flaunts its compliance badge, USDT has quietly infiltrated every regulatory gray area; while DAI indulges in its decentralized temple, USDT has long become buddies with major exchanges. This down-to-earth survival wisdom has made USDT stronger after each crisis, like the Hydra in Greek mythology, which grows two heads for every one that is cut off.

But historical turning points often occur inadvertently.

As institutional investors flood into the market, Wall Street's demand for "clean" stablecoins is quietly changing the rules of the game. BlackRock's dollar institutional digital liquidity platform choosing to partner with USDC, and Visa piloting USDC settlements, all hint that when traditional financial giants truly enter the field, they prefer stablecoins with compliance teeth.

DAI faces a more philosophical dilemma. In order to expand its scale, it has to introduce more centralized assets as collateral, a compromise that makes it gradually lose its luster in the eyes of decentralization purists.

It's like an idealistic youth who, after entering middle age, has to bow to the pressure of making a living. Although their wallet is fuller, the light in their eyes dims.

The ultimate arbiter of this stablecoin battle is actually the silent despot of market habits. Exchanges are reluctant to add new trading pairs, market makers are unwilling to provide additional liquidity, and ordinary users do not want to change their usage habits— these invisible resistances form USDT's most solid moat. To overthrow a giant that occupies 60% of the market share, it takes not only a better product but also a complete revolution in user habits.

The current contest resembles the browser wars of the past. Everyone knew that Internet Explorer was riddled with vulnerabilities, but it still dominated the market for more than a decade thanks to its bundling with the Windows system. It wasn't until Chrome emerged with a revolutionary experience that history was rewritten.

USDT's challengers are waiting for their "Chrome moment," but the question is: in this instant-gratification cryptocurrency world, how much patience will the market give them?

Investors' Survival Law: Finding Dawn in USDT's Dusk

When the storm comes, smart seagulls do not argue about when the dark clouds will disperse, but adjust the angle of their wings and continue to soar.

Facing USDT's uncertain future, investors need not a gambler's mentality of taking sides, but the risk sense of an old sailor. In this stablecoin upheaval, the real winners will be those who engrave "risk aversion" into their investment DNA.

The market never announces the arrival of a crisis with fanfare.

USDT's risk signals are often hidden in corners that are easily overlooked: a certain exchange suddenly reduces USDT trading pairs, a market maker quietly lowers the quote depth, or a vague footnote change in Tether's financial report. These subtle fluctuations are like electromagnetic wave anomalies before an earthquake, and only the most vigilant observers can capture the danger signals.

Diversifying positions is not a cowardly risk-avoidance strategy, but the wisdom of those who have experienced market vicissitudes.

Reasonably allocating stablecoin assets between USDT, USDC, and DAI is like putting eggs in different baskets before a storm. This strategy may seem to give up some liquidity returns, but it can protect the most important principal when a black swan event occurs.

Those investors who were fully invested in UST during the LUNA collapse best understand the painful lesson of "not mistaking faith for risk management."

The market's cruelest joke is that crises always arrive when everyone lets their guard down.

When USDT maintains a perfect peg for several months in a row, and social media is filled with the argument that "Tether is too big to fail," that is often the moment to be most vigilant. Mature investors are like antelopes on the savannah