The Ethena USDe lost $8.3 billion in market capitalization after the October market crash
The synthetic stablecoin Ethena USDe has lost $8.3 billion in market capitalization since the October crash, as institutional investors move away from leveraged models and synthetic collateral structures.
According to a report from 10x Research, the October sell-off became a turning point for the crypto market, shifting the bullish phase into a period of deleveraging. The crash wiped roughly $1.3 trillion from the crypto market, or nearly 30% of its total capitalization at the time.
The Ethena USDe stablecoin, which relies on synthetic collateral and hedging mechanisms rather than traditional fiat reserves, faced a “sharp loss of confidence” in these conditions, analysts say. As reported by Cointelegraph, USDe’s market capitalization was nearly $14.7 billion on October 9. In just over two months, this value fell to about $6.4 billion.
Loss of peg due to Binance
Following the October 10 crash, USDe temporarily lost its peg and dropped to around $0.65 on Binance. Ethena Labs founder Guy Young stated that the brief de-peg on the exchange was caused by an internal oracle issue at Binance, rather than problems with the stablecoin’s collateral, protocol, or redemption mechanism.
He said USDe issuance and redemption continued to function normally during the market crash, with about $2 billion redeemed within 24 hours across major DeFi platforms, while only minor price deviations were seen elsewhere. At the time of writing, USDe is trading at $0.9987, according to CoinMarketCap.
Analysts therefore attribute the current loss in capitalization purely to market conditions — reduced borrowing and investor preference for fiat-backed stablecoins. Research firm 10x Research noted that the current weakness is driven less by retail capitulation and more by deliberate capital withdrawal from regulated institutions. As leverage and liquidity declined, Bitcoin decoupled from both stocks and gold, trading more like an isolated risk asset rather than a macro hedge.
As we wrote, When stablecoin loses stability: USDe downfall offers lessons for crypto market
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