Venezuela's USDT plummeted by 40%, is this really economic recovery?

Venezuela’s local USDT price has plummeted over 40% in the past 10 days, dropping from a high of 880 Bolivars on Binance P2P market to around 500 Bolivars. This change has sparked market discussions: does the cooling demand for USD mean the economy is beginning to stabilize? However, analysts’ answers are not optimistic—they see this more as an “overreaction” rather than a true economic turning point.

Political Variables Behind the Price Collapse

Since January 7, USDT prices have been in a continuous decline. This timing is no coincidence. In early January, Venezuela’s political situation experienced intense fluctuations. The U.S. took action against Nicolás Maduro, which temporarily increased market uncertainty. But then, a turning point occurred. During Delcy Rodríguez’s administration, the Venezuelan government reached several new oil agreements with the U.S., directly changing market expectations for foreign exchange inflows.

According to relevant information, the oil agreements between the U.S. and Venezuela involve complex geopolitical negotiations. The new agreements are interpreted by the market as a sign of improved foreign exchange supply prospects, which directly reduced local buyers’ urgent demand for stablecoins like USDT. The previous rush to buy USDT at high prices has ceased, and sellers are now willing to sell at lower prices.

USDT Price Changes Comparison

The gap between the official central bank exchange rate and the market price has also narrowed significantly to about 31%, something that was hard to imagine in the past.

Hidden Concerns Behind the Surface Stability

Ecoanalítica, a market analysis agency, pointed out that this volatility is a “overreaction” to sudden events, not an issue with USDT itself. This judgment is crucial—it acknowledges that the price decline is real but denies that it reflects an improvement in economic fundamentals.

News reports and related information all mention an important warning: surface stability does not mean a reduction in living costs. Several structural issues remain:

• Food and service prices are still rising, inflation pressures have not disappeared
• Household and business purchasing power has not rebounded in tandem
• The narrowing of the exchange rate spread is more a reaction to short-term foreign exchange supply improvements rather than structural changes

This is a Buffer Period, Not a Signal of Recovery

USDT, as an important indicator of residents’ demand for USD, has seen demand decline, which indeed reflects a change in market sentiment. But this is more like a “buffer period” rather than a confirmation of long-term economic recovery.

The future trend will still depend on three key factors:

• Whether external capital inflows can be sustained
• Whether oil export revenues remain stable and grow
• Whether policy continuity can be maintained

If any of these three conditions change, the current balance could be quickly disrupted. Especially considering Venezuela’s political volatility, short-term foreign exchange improvements are unlikely to translate into long-term economic stability.

Summary

The 40% plunge in Venezuela’s USDT price indeed reflects the market’s new expectations for foreign exchange supply, but this is more a market reaction to short-term political changes rather than a fundamental improvement in the economy. Living costs are still rising, and structural issues remain unresolved. Whether this “buffer period” can evolve into genuine economic recovery ultimately depends on the sustainability of external funding, oil revenues, and policy stability. For investors monitoring the Venezuelan market, remaining cautious of the fragility behind “surface stability” is still necessary.