Hello everyone, I'm V-Scythe. Your go-to analyst for bookmakers.

I completely understand everyone's confusion about the market trend right now. Why did the market fall instead of rise after QE?
For traders, many hot topics are mostly "noise," while the pooling and flow of funds are the important indicators for analyzing and predicting market trends.

Recently, I've noticed that major platform companies are constantly launching their own stablecoins, which has caught my attention.

The stablecoin sector has recently undergone dramatic changes, with the core logic shifting from "wild growth" to "compliant supply." The latest GENIUS Act in the United States is reshaping issuers' strategies.

1. New moves by industry giants

Tether (USDT) launches "USA₮" (US-exclusive version).
Background: In response to the latest U.S. regulatory requirements (GENIUS Act), Tether announced the launch of the stablecoin USA₮, designed specifically for U.S. residents.
Key points: The token will be issued on Tether's new tokenization platform, Hadron, and custodied by Anchorage Digital Bank. This signifies Tether's attempt to re-enter the US domestic market with a "fully compliant" approach.

Circle (USDC) tests the waters of a privacy-focused stablecoin, "USDCx"
Action: Circle launched a privacy-protected stablecoin called USDCx on its privacy-focused public blockchain, Aleo.
Objective: Primarily targeting institutional users, this product aims to address the pain point of institutions not wanting to expose their on-chain traces during large-amount transfers by combining "bank-level privacy" with "compliance with regulations".

2. Emerging Forces and the National Team
Kyrgyzstan issues gold-backed stablecoin "USDKG"
Action: The Kyrgyz government announced the launch of the gold-backed stablecoin USDKG, with an initial issuance of $50 million.
Significance: This is a typical case of "sovereign endorsement + physical asset (RWA)" which aims to modernize cross-border payments using blockchain technology and bypass the inefficiencies of traditional banks.
Anchorage Digital & OSL Group
Partnership: Hong Kong-listed OSL Group has selected Anchorage Digital to issue its USD stablecoin, USDGO. Anchorage is becoming a core infrastructure provider for compliant stablecoin issuance.

3. Regulatory bellwether: The GENIUS Act (Genius Act?)
Key provisions: The GENIUS Act recently pushed forward by the United States imposes strict restrictions on stablecoins, the most notable of which is "prohibiting stablecoin issuers from paying interest to holders."
Impact: This directly impacts similar "earn interest on holding" models, forcing issuers (such as Tether's USA₮) to compete based on asset security, liquidity, and compliance, rather than yield.

Below is an in-depth, research-level analysis of this topic:

(The development status of global stablecoins and their impact on BTC market capitalization and price)

My views are as follows:
The core logic has undergone a major change: the new US GENIUS Act is forcibly altering the risk appetite of funds, which will directly reshape the pricing logic of BTC.

Let's first examine the logic from a professional perspective:

I. Core Variable: The "Mandatory Zero-Interest" Effect Triggered by the GENIUS Act
This is the most undervalued fundamental change in the market right now, but it has the greatest impact on BTC.

Current situation: The GENIUS Act (the U.S. Stablecoin Innovation Pilot Act), passed in July 2025, has entered the implementation phase.

Key terms: Mandatory requirement for US-compliant payment stablecoins (such as Tether's newly issued USAT and Circle's USDC) to prohibit them from paying interest to holders.

In the past: Funds held in stablecoins could earn DeFi interest (3%-5%), and stablecoins were considered "interest-bearing assets".

Present/Future: Compliant stablecoins have become pure "zero-interest cash." Given the continued existence of inflation, holding compliant stablecoins equals losing money.

Funding behavior: This "profit that disappears due to compliance" will force a huge amount of funds to be rotated.

They only have two destinations:
1. Go left (safe haven): Invest in RWA (on-chain US debt), such as BlackRock's BUIDL, which has now surged to over $30 billion.
2. Move to the right (game theory): Invest in BTC. Since holding USDT also yields 0 interest, it's better to hold volatile assets to seek capital gains.
My conclusion: The implementation of this bill effectively eliminates the "middle ground" and forces funds to take sides.

This provides long-term passive buying support for BTC. It is also one of the reasons for the recent price surge during the wide-range fluctuations.
This is similar to the movie "Let the Bullets Fly," where Zhang Mazi forces wealthy households to remain neutral or join his side to fight against Huang Silang.

II. A New Game Between Total Stablecoin Market Cap and BTC Market Cap Share (BTC.D)
The total market capitalization of stablecoins worldwide is now approaching a historical high of $300 billion, and this has led to new characteristics in its impact on Bitcoin:

Phenomenon A: The Differentiation in "Self-Governance" Between USDT and USDC
USDT (Tether): Still serves as "trading reserve funds." Its market capitalization continues to grow, primarily used for leverage in offshore markets and bottom-fishing. USDT issuance is often a synchronized indicator of BTC price increases.
USDC (Circle): It is transitioning into a "settlement tool." Although its market capitalization has rebounded, it is now used more for inter-institutional transfers and RWA purchases, rather than for direct BTC purchases.
Phenomenon B: The 60% threshold of Bitcoin's market capitalization
Currently, BTC.D is maintaining a high level of 55%-60%.
V-shaped deduction:
Under the GENIUS Act, institutional funds are hesitant to allocate large amounts of funds to altcoins due to the increased SEC regulatory risks they face. Therefore, the primary target for newly added stablecoin liquidity (the incremental amount within the 300 billion) remains BTC.
The arrival of the "altcoin season" will only be indicated when the market capitalization share of BTC.D shows a clear peak and decline (e.g., falling below 52%), and when the market capitalization of stablecoins continues to surge driven by USDT (retail investors/hot money).

Previously, the issuance of new stablecoins was seen as a drain on Bitcoin's liquidity.

3. Price Forecast: BTC's Future Outlook Based on "Liquidity"
Based on the stablecoin data above, we can make the following predictions regarding market trends in Q4 and early next year:
Support level logic (Floor):
Since compliant stablecoins offer no interest, idle funds (dry money) in the market tend to buy quickly during BTC pullbacks to hedge against inflation. This explains why recent BTC pullbacks have been increasingly shallow. The high market capitalization of stablecoins limits the potential for a significant BTC crash.
This explains why the market hasn't fallen much recently and has instead been fluctuating widely.

Impulse logic:
Pay attention to the size of “synthetic dollars” (such as Ethena’s USDe or similar delta-neutral stablecoins).
Signal: If the market starts minting large quantities of these "yielding synthetic stablecoins" (currently exceeding 10 billion), it indicates that the market has an extremely high risk appetite, and funds are willing to take on complex contract risks for the sake of yield.
V-Scythe Theory: When this portion of the fund expands rapidly, it usually corresponds to a local top in the price of BTC (due to excessive leverage). Conversely, if the funds flow back into purely compliant stablecoins (USAT), it indicates a period of consolidation for BTC.

4. V-Scythe's "Analyst Perspective" on the Impact of Stablecoins on BTC
1. "Don't just look at the K-line of BTC, you have to look at the water level in the reservoir."
2. As long as the market capitalization of stablecoins continues to rise, and the US insists on not paying interest to the U.S., the buying pressure on BTC will not stop. The recent fluctuations are essentially this huge amount of idle capital looking for an opportunity to enter the market.

1. Fatal Blind Spot One: The "Backdoor" of the GENIUS Act – Tokenized Deposits
I previously mentioned that the GENIUS Act prohibits compliant stablecoins (such as USA₮) from paying interest, which theoretically would force funds to buy BTC. However, there is a huge loophole here, and Wall Street is exploiting it.
Vulnerability details: While the GENIUS Act prohibits "payment stablecoins" from paying interest, it allows "tokenized deposits" to pay interest.

Fund Flows: Large institutional funds (Smart Money) are not foolishly holding 0% interest USA₮, nor are they forced to invest all their capital in BTC. They are transferring funds that were originally in USDC/USDT to "tokenized deposits/funds" like JPM Coin or BlackRock BUIDL.

Conclusion: This means that while there appears to be ample on-chain funding, this money has actually become "good boy money," reaping 4%-5% risk-free US Treasury yields instead of eagerly waiting to buy the dip in BTC as before. This directly weakens the buying support at the 80,000 level.

2. Fatal Blind Spot Two: The Liquidity Illusion – “The money is off the market, not on the order book.”

The truth in the data:
Despite a total market capitalization of $300 billion for stablecoins, according to CME and exchange data from early December, BTC's market depth is at a low for the year.
This means that the vast majority of stablecoins are on the sidelines (wallet) rather than in limited orders.

Chain reaction:
If BTC falls below the key 90,000 level and triggers quantitative stop-loss orders, a "vacuum zone" may appear in the 80,000-90,000 range below. Just like the flash crash in October, a small amount of selling pressure could break through the weak buy order wall.
Once the price falls below 80,000, a large number of on-chain looping strategies (such as depositing BTC and borrowing USDT) aimed at "earning interest" will face liquidation. Cascading liquidation could very likely drive the price down to the 50,000-60,000 range in an instant, in order to find genuine "hard support."
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3. Fatal Blind Spot Three: Tether's "Reflexivity"
This is the gray rhino that we least want to mention. If BTC really does drop to 50,000, USDT itself might go from being a "savior" to a "market dumper."
Tether's holdings: Tether officially holds a large amount of BTC as reserve assets.
V-shaped deduction:
BTC falls -> Tether's net reserve asset value decreases -> Market panic causes USDT to de-peg (FUD).
Users panicked and exchanged USDT for USD, forcing Tether to sell BTC and US Treasury bonds to cope with the redemption.
Tether selling tokens = further market crash.
Historical lesson: USDe (Ethena) experienced a brief decoupling in October due to a similar mechanism (falling to 0.65), and this "negative feedback spiral" fully supports the view and judgment of "extreme sell-off".
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"V-Sickle" Future Market Development Scenario
Based on my technical analysis and the aforementioned fundamental vulnerabilities, the likely scenario is as follows:
Bull trap and gradual decline (90,000-100,000): This is right now. Retail investors, seeing the 300 billion stablecoin market capitalization, think "it can't fall any further" and buy in at this point.
Liquidity Depletion (Break 8W): A macroeconomic trigger (such as an ambiguous stance from the Federal Reserve) causes prices to fall below 8W. At this point, it is discovered that the money in "tokenized deposits" is completely untouched, and no one is intervening to support the price.
The Flush (5W-6W): Leveraged liquidation, Tether FUD resurfaces, and prices quickly plunge to my predicted 5W-6W range.
The real bottom: Only when it reaches that point will the funds that were forced to buy BTC under the GENIUS Act (because the price has fallen to rock bottom and the cost-effectiveness exceeds that of US Treasury yields) truly enter the market.

In summary, we are currently facing the harsh reality of a "zero-sum game." The high market capitalization of stablecoins is more likely due to "many people watching from the sidelines" rather than "many people wanting to buy."

Finally, here's the plain language version:

I identified signs of a deep pullback based on technical analysis of the yearly moving average, which I recognized as a dangerous signal.
So what exactly caused the price of BTC to fall back to below 70,000 or even 50,000?

Reason 1:
The Fed's QE and the issuance of on-chain US Treasury bonds are essentially a change of reservoir. It's a transfer from one hand to the other.
The enactment of the Genius Act, aimed at stabilizing the lack of interest-bearing assets, forces money to seek new reservoirs. On-chain US Treasury bonds and new stablecoins have thus become the primary targets.

Reason 2:
Major institutions have begun issuing their own stablecoins to leverage staking and interest income to absorb massive quantitative easing (QE).
They will only seek out higher-risk assets like BTC when the interest earned from staking is no longer sufficient to meet the growth of their funds.
They will buy assets at rock-bottom prices again, introduce policies to force stablecoins to exit the market, and then drive up the price of BTC.
This is a scheme by large investors and market manipulators to exploit the market.

Everyone knows that the Federal Reserve is in a difficult position to back down from its rate cut.
The Federal Reserve manipulated the market without actually spending any money by simply transferring funds between its own hands.
Large institutional investors absorbed the excess funds and reaped huge profits from the interest.
Ultimately, all the benefits are paid for by retail investors and the market.
Trump has successfully implemented his debt reduction strategy.
This completed another round of tidal harvesting.

By this point, harvesting had become an art.

#Federal Reserve #V-shaped price analysis $BTC #RWA