Why Bitcoin Traders Fear A Repeat Of July 2024’s Crash Next Week

For years, Chinese crypto investors have relied on USDT and other dollar-pegged stablecoins as a safe harbor from market volatility. But a dramatic shift in currency dynamics is forcing them to reconsider: what happens when the “stable” coin loses value against your home currency?

Over the past six months, the offshore renminbi has surged from 7.4 to 7.06 against the dollar, marking its strongest level in a year. While this appreciation benefits China’s broader economy, it creates an uncomfortable reality for stablecoin holders—their dollar-denominated assets are quietly bleeding value when measured in yuan terms.

The Perfect Storm Against Dollar Holdings

The mathematics is straightforward but painful. A Chinese investor who converted 100,000 yuan to USDT in April at 7.4 would now receive only about 95,400 yuan when converting back at 7.06—a 4.6% loss without touching a single volatile crypto asset.

This isn’t a temporary blip. The dollar index has fallen nearly 10% this year as weak US employment data and aggressive Fed rate cuts have triggered massive unwinding of carry trades. Meanwhile, China’s stock market rally—with the Shanghai Composite breaking 4,000—has attracted foreign capital, further strengthening the yuan.

Additionally, China’s trade settled in RMB more than doubled between January and July. Corporations increased hedging with financial contracts, boosting practical RMB demand beyond speculation.

Goldman Sachs research suggests that every 1% yuan appreciation is correlated with a 3% gain in Chinese equities, creating a self-reinforcing cycle that could push the currency even higher.

USDT: From Safe Haven to Risk Asset

The change means dollar stablecoins are no longer a reliable hedge for Chinese crypto users. The combination of a weaker USD and a stronger RMB reduces USDT’s local purchasing power.

Tighter regulations deepen this challenge. In May, China’s central bank and 13 ministries officially named stablecoins as a concern in anti-money laundering and foreign exchange oversight. Recent statements caution that stablecoins lack legal status and are vulnerable to illegal use, indicating a possible increase in enforcement.

On peer-to-peer markets, the USDT-to-RMB exchange rate has fallen below 7, reflecting both market pressure and regulatory risk premiums. Transaction fees and spreads have also grown.

Chinese Investors Pivot to Tokenized Real-World Assets

To manage eroding savings and increased regulation, Chinese investors are adopting new strategies. Rather than holding USDT, many now prefer on-chain, dollar-denominated real-world assets, such as tokenized US equities and gold. These assets can yield returns or appreciate, potentially offsetting currency losses and regulatory hurdles.

This trend aligns with a global move by institutional investors to tokenize physical assets, blending blockchain with traditional markets. For Chinese crypto holders, these alternatives maintain dollar exposure while offering diversification beyond pure currency bets.

The USDT’s rapid shift from a haven to a risk asset marks a significant change for both the Chinese crypto sector and the RMB. The era of treating stablecoins as risk-free savings accounts may be over for Chinese investors.

Dubai, United Arab Emirates, December 5th, 2025, Chainwire

Decentralized AI infrastructure startup closes seed and strategic rounds as it accelerates toward mainnet launch.

DeepNode, a decentralized artificial intelligence network aiming to democratize AI development, has successfully raised $5 million across two funding rounds: a $2 million seed round at a $25 million valuation and a subsequent $3 million strategic round at a $75 million valuation.​

The funding represents a significant milestone for the project, which is positioning itself as the infrastructure for "open intelligence", a network where AI developers, compute providers, and validators can collaborate and earn rewards without relying on centralized tech giants.​

Community-First Seed Round

DeepNode's seed round included participation from community members, with support from key network validators such as WildSageLabs from RoundTable21 and Rizzo from DNA, as well as infrastructure partner Gateway.FM.

What makes this raise truly special is that it was driven by our community. The validators, miners, and early adopters pushing decentralized AI forward - the company stated in its announcement on X.

The approach signals DeepNode's commitment to building what it calls a "community-first" ecosystem, where those who will actually operate the network infrastructure have early ownership stakes.​

Strategic Round Brings Global Infrastructure Investors

The strategic round was led by a consortium of Web3 and AI infrastructure investors, including Blockchain Founders Fund, Side Door Ventures, TBV, IOBC Capital, Fomo Ventures, and Nestoris. These investors bring expertise spanning enterprise integrations, operational scaling, and go-to-market support.​

XRP Price has seen a tough couple of months, falling 31%, but new data suggests that a potential reversal could be on the horizon. Social sentiment around XRP shows the highest level of fear, uncertainty, and doubt (FUD) since October.

After months of silent trading, Terra Classic jumped nearly 22% in the last 24 hours, now trading around $0.00003420. The sudden rise has brought new energy to the LUNC community, which has been waiting for a strong comeback ever since the project went through its historic crash in 2022.

But many in the community are wondering about the reasons behind the LUNC token price jump.

LUNC Trading Volume Spike by 370% 

One of the biggest reasons behind the sudden price rise is the huge jump in trading activity. Market data shows LUNC’s trading volume shot up by more than 370%, touching nearly $46 million across top exchanges.

At the same time, staking activity has also gone up. More holders have started locking their LUNC to support the network, which reduces the number of tokens available in the market.

On top of that, overall market sentiment has turned positive, with confidence levels now above 50%.

Burn Rate Continues To Support Price

Another key factor behind the rally is LUNC’s aggressive burn mechanism. In the last 7 days, the community has burned over 849 million tokens, reducing the circulating supply.

According to the burn tracker, Terra Classic has destroyed 426.79 billion tokens since May 2022, nearly 8% of the total supply. A shrinking supply becomes powerful when demand starts to rise, helping price recover faster.

Binance Upgrade Adds More Momentum

Adding to the excitement is the progress shown by Terra Classic developers. Over the past week, the team has shared updates about new system improvements, better security patches, and long-awaited upgrades that aim to make the chain more stable.

Recently, Binance confirmed it will support the Terra network upgrade happening on December 8, 2025, at block height 18,660,000. 

In the meantime, deposits and withdrawals will pause during the upgrade, but trading will continue as normal.

What’s Next for LUNC?

LUNC recently broke out of a falling wedge pattern and is holding above $0.000033, a key micro-support. The RSI sits around 59, suggesting the token still has space to move higher.

Analysts say the next major resistance levels are $0.000048 and $0.00009. If bulls push further, the high psychological level is $0.000125, a price many traders are watching closely.

CertiK’s latest U.S. Digital Asset Policy Report shows that 2025 marked a major turning point for crypto regulation in the United States. A series of federal actions finally provided the industry with its most straightforward rulebook yet, pushing the sector from years of uncertainty toward a more structured compliance environment. This shift is changing how banks, custodians, and crypto companies operate.

A Clear Three-Pillar Federal Framework

The regulatory progress centers on three developments: the GENIUS Act, the CLARITY Act, and the SEC’s decision to withdraw Staff Accounting Bulletin 121. Together, these measures form the core of a new national framework for digital assets.

The updated rules outline how stablecoins must be backed and redeemed, give clearer definitions for different types of digital tokens, and set standards for when institutions can legally offer crypto custody services.

For major banks and trust companies, this means less confusion and more predictable oversight. CertiK notes that firms entering the custody business now have clearer expectations, while stablecoin issuers must follow uniform requirements for reserves and operations.

States Add Their Own Rules

Even as federal regulation strengthens, states are continuing to build their own digital asset rules. CertiK highlights that more states are introducing licensing systems, cybersecurity standards, and anti–anti-money-laundering requirements. Although each state differs, the overall direction is toward a more consistent compliance baseline for companies operating nationwide.

The report also points to rapid advances in blockchain analytics and smarter code-auditing tools, which are becoming increasingly important as smart contracts handle more financial activity.

Permissioned Digital Assets Gain Traction

CertiK’s review finds that traditional financial institutions are showing growing interest in Permissioned Digital Assets, blockchain-based instruments designed to operate fully within regulatory standards.

With liquidity now splitting between major regulatory regions like the U.S. and Europe under MiCA, companies that can operate across different rulebooks and build compliant infrastructure in multiple jurisdictions are likely to gain a competitive advantage.

FAQs

As of 2025, U.S. crypto regulation relies on the GENIUS and CLARITY Acts, federal stablecoin & custody rules, plus state-level licensing and compliance layers.

Not all, but many must follow new federal standards, while states require licenses and strong cybersecurity for operating legally.

The U.S. uses a mix of federal acts and state laws, while Europe’s MiCA offers one unified rulebook. Both aim for safer, more transparent markets.

The European authorities have taken down a cryptocurrency fraud and money laundering network that is believed to have laundered over 700 million euros. Multiple European agencies collaborated in the two-phase operation, which led to the arrest of nine individuals.

Taking Down a Vast Fraud Network

According to Europol’s announcement yesterday (Thursday), “the criminal network operated numerous fake cryptocurrency investment platforms, luring thousands of victims with advertisements promising high returns.”

The perpetrators contacted the victims repeatedly from call centres, according to the agency, and used social engineering tactics to pressure them into making investments on the fake trading platforms.

The network came to light after authorities began an investigation into a single fraudulent cryptocurrency platform.

The reach and set-up of the network are said to span across Europe and beyond.

Another earlier report revealed that the European agencies removed over 1,400 fraudulent online trading platforms that tricked retail investors. German investigators, working alongside BaFin, Europol and Bulgarian authorities, traced networks of fake brokers luring users into investing large sums with promises of high returns.

Raids and Arrests

The latest nine arrests were made in the first phase of the crackdown, which took place on 27 October, involving police raids across Cyprus, Germany and Spain at the request of French and Belgian authorities. It also resulted in the seizure of bank accounts, cash, cryptocurrencies, digital devices and high-value watches.

In the second phase of the operation, carried out on 25 and 26 November, the authorities focused on targeting the affiliate marketing set-up that supports these online scams, which use fake advertisements with photos and deep fake videos of celebrities and even politicians.

Interestingly, the Italian financial market regulator recently pointed out that deep fake ads of the country’s Prime Minister, Giorgia Meloni, are being used to promote fake investments.

Agencies from Belgium, Bulgaria, Germany and Israel conducted the latest searches against companies and suspects involved in fraudulent advertising campaigns on social media platforms.

It appears that the majority of the fraud operations were based in Cyprus, Germany and Spain, while companies in Belgium, Bulgaria, Germany and Israel ran the fake ads.

“Following these two coordinated actions and multiple arrests and seizures, investigative authorities will continue to track the criminal organisation’s assets in the countries where it operates and resides,” Europol stated.

Recently, the European authorities also closed a crypto-mixing service, “Cryptomixer,” allegedly used by cybercriminals to launder over €1.3 billion in Bitcoin. Authorities confiscated three servers, the platform’s domain, more than €25 million ($29 million) in BTC and over 12 terabytes of operational data.