Recently, I was chatting with a friend who trades forex, and he shared a set of data that left a deep impression on me — the yield on the 10-year U.S. Treasury bond dropped below 4.03%, hitting a one-month low. He said casually, "Early next year, the dollar might really bottom out and weaken."

Many newcomers in the crypto space might think macroeconomic data like this is irrelevant, but the truth is quite the opposite. These seemingly distant numbers are actually like an invisible hand, quietly influencing the purchasing power of USDT in our accounts.

**What does the decline in U.S. Treasury yields mean**

Think of U.S. Treasury yields as a "thermometer" for the dollar. Falling yields = investors' enthusiasm for dollar assets cools down = the dollar might not be as in demand as before. This logical chain is straightforward.

The Federal Reserve has already started a rate-cutting cycle, which directly leads to lower borrowing costs for the dollar, making funds in the financial system more abundant. Historical patterns tell us that in such an environment, capital tends to flow from low-yield assets to areas with greater growth potential — cryptocurrencies happen to be on that list.

More importantly, there is a negative correlation between real U.S. Treasury yields and cryptocurrency prices. When real yields decline, market risk appetite increases, and investors become more willing to allocate funds to high-risk, high-reward assets like Bitcoin. Conversely, the lower the U.S. Treasury yield, the more attractive the crypto market becomes.

**How a weakening dollar affects your U in hand**

For beginners, the first thing to understand is a fact: although USDT is pegged at 1 dollar, if the dollar itself depreciates, the actual purchasing power of U shrinks. Simply put, using the same amount of U to trade, you can exchange for more other assets — which is beneficial for holders, but for those who need U to hedge risks, it means an increase in implicit costs.