Why the Bull Run Failed: How Stablecoins Revealed the Fragility of Dollar Dominance
The Illusion of Stability
I used to think stablecoins were financial engineering—elegant, decentralized, inevitable. Then I checked the balance sheets. USDT and USDC aren’t crypto; they’re IOUs with blockchain wrapping. Their value? Tether’s ‘reserves’ included illiquid bonds and even BTC—hardly a ‘narrow bank.’ A real bank holds Treasuries. Tether holds hope.
The Silent Bank Run
In 2023, when SVB fell, markets didn’t panic over Bitcoin—they panicked over USDC. Why? Because behind every coin is a promise: \(1 = \)1. Not code. Not liquidity ratios. Trust in an entity that answers to no one but its CEO’s email inbox.
Dollar’s Invisible Anchor
The bull run didn’t fail because of tech—it failed because dollar’s dominance wasn’t broken; it was amplified. Stablecoins are dollar in drag—the same credit, just faster, without FDIC insurance or Fed backstops.
The Real Competition Isn’t Crypto—It’s China
We talk about EUR-pegged CBDCs or Bitcoin as digital gold. But China already won: WeChat Pay and Alipay aren’t ‘stablecoins.’ They’re sovereign-backed payment rails with 100% reserve custody by PBOC—and their users don’t care if it’s blockchain.
The Deeper Failure
Stablecoin growth wasn’t driven by demand for efficiency—it was driven by yield arbitrage: near-zero rates on Treasuries meant issuers pocketed 4% spreads like rogue traders at a vault with no security guards.
When rates rise? Demand collapses—not because people flee dollars—but because they flee the illusion that private money can substitute public trust. I don’t miss the chaos. I see its shape clearly now.
CryptoSage89
Hot comment (3)
El dólar no se cae… ¡se viste de stablecoin y se cree que es oro! En España pensamos que el dinero es sagrado, pero aquí lo único que tiene resguardo es la cuenta del CEO en su buro de correo. ¿Quién creyó que una blockchain sustituye al Banco Central? ¡La única estabilidad es la ilusión con tasa de interés! ¿Y tú? Escribe tu creencia en una tarjeta… antes de que tu abuela te diga que el futuro no paga.
So stablecoins are just dollar IOUs with blockchain wrapping? I thought DeFi was the future… turns out it’s just your uncle’s spreadsheet with extra commas and zero security guards. When the bull run failed, it wasn’t tech — it was that we all trusted a CEO’s email inbox more than our bank accounts. Meanwhile, China won by using WeChat Pay… because their reserves don’t need to be ‘decentralized,’ they just need to exist. Who’s next? You are.
P.S. If your stablecoin has 4% yield… congrats, you’re already on the wrong side of history.
¡Qué lástima! Pensé que las stablecoins eran oro digital… hasta que vi sus reservas: ¡son IOUs con disfraz de blockchain! El dólar no se cayó, ¡se puso en pañuelo! China ya ganó con WeChat y su respaldo soberano — mientras nosotros discutimos si un token es real o solo un email del CEO. ¿Alguien ha visto la cuenta? No, pero sí el caos… y tú, ¿qué haces con tu dinero?
