Recently, friends in the crypto community have been complaining: Why is USDT getting less and less valuable? Is it going to collapse? Let me get straight to the point—there’s nothing wrong with USDT itself. The drop is purely because the OTC premium has cooled off; it has absolutely nothing to do with any so-called blow-up or collapse.

Why is USDT dropping? Simply put, the market supply and demand are out of balance. With the market in such a bearish state and prices going sideways every day with no profit opportunities, who would dare to enter? There are very few buyers for USDT; meanwhile, the line of people trying to sell is huge—projects liquidating assets, people cashing out after making enough, and some giving up altogether and leaving the space. Everyone is dumping USDT, so supply far exceeds demand, and of course, the price is going to drop.

On top of that, regulators are cracking down on OTC merchants, making it harder to receive USDT and adding more rules. Merchants can only buy at lower prices and charge higher fees, so buying power is weakened and the price of USDT naturally can’t go up. Previously, people could arbitrage on exchange rates, but now the RMB exchange rate is super stable, so that arbitrage opportunity is gone and so is that demand.

In reality, USDT is a barometer of sentiment in the crypto space—you can see the market at a glance: when USDT rises, it means new retail investors are flocking in; when USDT is stable, it means everyone is waiting and watching; when USDT drops, it basically means retail investors are running away. But let’s be clear: foreign exchanges are anchored as normal, there’s nothing unusual on-chain, and the capital system is intact. This drop is just the premium disappearing, not any kind of blow-up!

On a practical note: if you want to buy the dip or are just entering the space, swapping for USDT now is actually a good deal—you’re basically saving on entry fees. If you’re thinking about hoarding USDT to arbitrage, forget it, there’s basically no room for that now. Remember, USDT is just a bridge for funds, not an investment tool!

One last truth: when the bull market comes, USDT will naturally rise; during bearish, choppy markets like now, cheap USDT is the norm. Don’t get scared by short-term fluctuations—following market sentiment and avoiding reckless moves is the smartest thing you can do.
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