2025-12-31 18:22:11

The days of the US dollar in 2025 are not looking good.

The entire year saw nearly a 10% depreciation, marking the worst performance since 2017. Meanwhile, the euro appreciated by 14%, and the British pound also strengthened, indicating a clear shift in the global currency landscape. For crypto asset traders, this weakening of the dollar directly impacts the value anchoring of stablecoins like USDT, which is worth paying attention to.

Why is the dollar so weak? Two main reasons:

First, the tariffs implemented by the Trump administration disrupted international trade, reducing the demand for the dollar as a safe-haven asset. Second, the Federal Reserve began a rate-cutting cycle in September, directly undermining the dollar’s interest rate appeal. Originally, high-interest-rate dollars were in high demand; now, with rates lowered, funds are naturally seeking other opportunities—including digital assets.

Even more concerning are market expectations. In 2026, the Federal Reserve may continue to cut rates 2-3 times, while the European Central Bank might maintain current rates. This narrowing interest rate differential will put even more pressure on the dollar.

Another key point in time: in May this year, Powell will step down as Federal Reserve Chair. If the new chair leans dovish and is more accommodating to White House policies, the dollar could face continued downward pressure. Even Deutsche Bank has issued warnings, saying this is one of the worst performances in the floating exchange rate era.

Many large institutions are quietly shifting away, with institutional funds continuously withdrawing from dollar assets, and various currency hedging operations exerting ongoing pressure on the dollar. Recently, driven by the AI boom, the dollar rebounded by 2.5%, but this is just a fleeting rally; the long-term trend remains pessimistic.

So the question is—can the dollar stage a comeback in 2026? Or will it continue to decline? At this stage, no one can give a definitive answer. What’s your take on this? Feel free to share your opinion in the comments.

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PhantomHunter

· 3h ago

This wave of USD decline, stablecoin holders need to be cautious. The peg of USDT could potentially break at any time.

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BearEatsAll

· 3h ago

The recent depreciation of the US dollar is honestly quite severe, directly impacting the credibility of USDT... It feels like stablecoins need to be re-evaluated.

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MeaninglessGwei

· 3h ago

What’s going on with the US dollar? A 10% devaluation hits right in the heart. Can we still trust USDT? --- I knew from the start that lowering interest rates would lead to this; funds are definitely moving elsewhere, including the crypto world. --- If Powell steps down in May and the new chair is truly dovish, then we might have a chance. --- Institutions are secretly withdrawing from the US dollar. I think the signal has to be pretty obvious for people not to see it. --- The euro rising 14%—what’s going on? The dollar still wants to turn the tables, but that’s just dreaming. --- The 2.5% rebound in AI was just a flash in the pan; long-term, it’s still heading down, no discussion. --- Tariff policies and trade frictions are causing chaos. The US dollar’s days are indeed tough. --- The real issue is who can predict 2026. Honestly, it’s all just gambling. --- The narrowing of interest rate spreads is the real killer. The European Central Bank remains firm on no rate cuts; how can the dollar compete? --- Deutsche Bank has issued warnings—aren’t they enough? This is the worst since the floating exchange rate system began.

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DancingCandles

· 3h ago

The recent decline of the US dollar, stablecoins really need to be cautious. If USDT's peg breaks, it will be troublesome. Institutions are quietly withdrawing from the dollar, while retail investors are still bottom-fishing. The gap is widening. The rate cut wave is coming, funds will definitely flow into cryptocurrencies. Whether we can bottom out this time depends on luck. Powell stepping down in May? If the new chair is truly dovish, the dollar is likely to continue falling. The crypto circle is getting interesting. The AI rebound is just a smoke screen. The long-term downward trend of the dollar cannot be changed. This logic is sound. Euro surged 14%. Why do I feel Europe is also getting into digital assets? Dollar vs. crypto assets, let's see the real story in 2026. Take a gamble? This time is different from the past. The signals of institutional-level withdrawals are too obvious.

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