Bitcoin News Today: Synthetic Stablecoin's $0.65 Depeg Exposes Crypto's Fragile Stability Promise

The U.S. dollar-pegged stablecoin USDe, issued by Ethena, temporarily depegged to $0.65 on Binance during a broader crypto market collapse triggered by U.S. President Donald Trump's announcement of 100% tariffs on Chinese imports. The depegging occurred amid a record $19.16 billion in crypto liquidations over 24 hours, as reported by CoinGlass, marking the largest such event in history. USDe, which relies on a mix of cryptocurrencies and a basis trade strategy for its yield, briefly traded below parity before recovering to $1.00, according to Ethena Labs. The stablecoin's depegging was attributed to extreme volatility in altcoin prices and leveraged positions, which exacerbated liquidity imbalances during the sell-off .

The market turmoil was fueled by Trump's tariff announcement, which sent global equities and crypto assets into freefall. Bitcoin (BTC) plummeted 10% to $107,000, Ethereum (ETH) dropped over 15%, and altcoins like Solana (SOL) and BNB fell nearly 20%. Binance confirmed it was reviewing affected accounts and considering compensation measures for users impacted by the depegging and liquidations . Ethena Labs emphasized that USDe remains overcollateralized and operational, with minting and redemption functions unaffected. The protocol noted that unrealized profit and loss (uPNL) from liquidated perpetual contracts would benefit the system as they are realized .

The incident highlights risks inherent in synthetic stablecoins, which differ from fiat-backed alternatives like USDC or USDT. USDe's design, which involves exposure to crypto collateral and leveraged derivatives, made it vulnerable to the sharp decline in altcoin prices. Analysts drew parallels to the 2022 collapse of Terra's algorithmic stablecoin UST, though Ethena's swift communication and transparency helped stabilize investor sentiment . Meanwhile, Ethena's governance token, ENA, fell over 40% during the crisis, reflecting broader market panic. Institutional investors, however, continued to accumulate ENA, purchasing $4.59 million in spot markets, albeit at a three-day low .

Regulatory and market scrutiny of stablecoins intensified following the depegging. The U.S. and EU have been advancing frameworks requiring 1:1 collateral and regular audits, which could impact protocols like Ethena. A study by Pacific-Basin Finance Journal (2025) emphasized the need for dynamic risk models to predict depegging, noting that USDe's volatility underscores the fragility of non-fiat-backed stablecoins .

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[2] Stablecoin depegging: The what and why | Kraken ... (https://www.kraken.com/learn/stablecoin-depegging)

[5] Stablecoin depegging risk prediction - ScienceDirect (https://www.sciencedirect.com/science/article/abs/pii/S092640/102640)

[10] Ethena – Why ENA's USDe depeg mirrors Terra UST fears (https://ambcrypto.com/ethena-why-enas-usde-depeg-mirrors-terra-ust-fears)

[13] Ethena's USDe Briefly Loses Peg During $19B Crypto ... - CoinDesk (https://www.coindesk.com/markets/2025/10/11/ethena-s-usde-briefly-loses-peg-during-usd19b-crypto-liquidation-cascade)