USDe stablecoin temporarily lost its peg to the dollar amid crypto collapse
By Hannah Perez
The cryptocurrency market’s third-largest stablecoin, Ethena’s USDe, fell as low as 65 cents on Binance, losing its peg to the US dollar amid the historic crypto liquidation event.
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- Ethena USDe fell to 65 cents on Binance.
- The third largest stablecoin loses its peg amid chaos in the cryptocurrency market.
- Historic liquidation event for USD $20 billion in 24 hours impacts the market.
- Trump’s announced 100% tariffs on China caused the shock.
- The ENA token fell amid losses and USDe recovered.
🚨 CHAOS IN CRYPTOCURRENCIES 🚨
Ethena’s USDe stablecoin lost its peg to the dollar, falling to 65 cents on Binance.
The crypto collapse has generated liquidations of 20 billion in 24 hours.
Trump’s 100% tariffs on China fuel investor panic.
More than 1.6… pic.twitter.com/uM7gvSMmYH
— Diario฿itcoin (@DiarioBitcoin) October 11, 2025
The cryptocurrency market experienced a Friday of chaos with record liquidations of almost $20 billion in the last 24 hours, driven by President Donald Trump’s announcement to impose an additional 100% tariff on Chinese imports.
In the midst of this storm, the USDe stablecoin, issued by the project Ethena and promoted as a “synthetic dollar” with a 5.5% yield for its holders, experienced a momentary decoupling from its peg to the US dollarfalling to 65 cents on the platform Binance.
According to data from the same platform collected by Bloombergthe token, which is supposed to maintain a fixed stability at $1, saw its price plummet abruptly during the resounding widespread collapse. The data of CoinGecko show that USDe recorded a drop to USD $0.9572 in the afternoon hours (Eastern Time), reflecting the extreme volatility caused by investor panic.
“Even a brief unpegging of a stablecoin can shake the market. Traders rely on them for liquidity, loans and collateral, so any loss of confidence can trigger liquidations and spread to broader crypto volatility.“warned Rachael Lucas, an analyst at BTC Marketsin statements cited by Bloomberg.
Trump’s tariffs on China caused chaos
The trigger for the shock was President Trump’s statement, which stoked fears of an escalation in the trade war with China and an exodus towards safe haven assets such as gold and Treasury bonds.
This caused a domino effect: Bitcointhe flagship cryptocurrency, sank $17,000 in a single day, hitting a local low below $106,000 after starting the week by breaking an all-time high of $126,000.
In total, more than 1.6 million individual traders were liquidated in the last 24 hours, with more than $16 billion of long positions liquidated in 24 hours, according to data from Coinglass.
ENA Token Hit, USDe Recovers
USDe, with a market value of USD $13,000 million and positioned as the third stablecoin largest, according to data from CoinMarketCapwas not immune to the pressure. Its return generation mechanism, based on a variant of “basis trade” that exploits discrepancies between spot and futures markets, was put to the test.
During bullish periods with high financing rates (interest paid by traders bullish in leveraged positions), this model generates attractive returns; However, in massive declines like this, rates plummet, threatening stability.
The impact extended to the governance token of EthenaENA, which plummeted up to 27% in the last 24 hours, according to CoinGecko.
Binancethe oldest exchange by volume, reacted by announcing a thorough review of the affected users, the details of the settlements and compensation measures. ““Our team is conducting a thorough review of impacted users, the details surrounding these settlements, and appropriate compensation measures.”indicated the platform in a post on its blog.
Despite the scare, the recovery was quick. USDe normalized shortly after the initial shock, supported by a digital asset reserve that includes stablecoins such as USDT and USDC, and remaining overcollateralized, as confirmed Ethena Labs in a post on X.
At press time, the token was trading at $0.9990 on Binancealmost completely recovering its parity. According to data from CoinMarketCapits price was 0.9997 dollars with a trade volume of USD $3.7 billion in 24 hours.
This incident highlights the inherent vulnerabilities of stablecoins with yields, which differ from competitors such as USDT and USDC – mainly backed by liquid assets such as Treasuries – by relying on more complex strategies. The episode highlights how geopolitical events can amplify risks in a crypto ecosystem increasingly interconnected with traditional markets.
Analysts like Lucas warn that these brief uncouplings could erode trust and exacerbate future volatility, reminding us that, in the world of crypto, stability is always relative.
Article written with the help of AI, edited by DailyBitcoin
Edited image from Unsplash
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