Ethena’s synthetic dollar USDe has shed about $8.3 billion in net outflows since the major liquidation event on Oct. 10, as confidence in leveraged and synthetic collateral structures continues to weaken.
According to a report from 10x Research, the October sell-off marked a turning point for the crypto market, flipping the bull phase into a period of deleveraging. The crash erased an estimated $1.3 trillion in crypto market value, nearly 30% of total capitalization at the time.
Ethena USDe (USDe), which relies on synthetic collateral and hedging mechanisms rather than traditional fiat reserves, faced a “sharp loss of confidence” under these conditions, the analysts wrote.
According to data from CoinMarketCap, USDe’s market cap stood at nearly $14.7 billion on Oct. 9. In just over two months, that value dropped to around $6.4 billion.
Related: $19B crypto market crash: Was it leverage, China tariffs or both?
USDe’s brief price depeg glitch
Following the Oct. 10 crash, USDe temporarily lost its peg and dropped to about $0.65 on Binance. Ethena Labs founder Guy Young said the brief depeg on the exchange was caused by an internal oracle issue at the exchange, not by problems with the stablecoin’s collateral, protocol or redemption mechanics.
He said USDe minting and redemptions functioned normally during the market crash, with about $2 billion redeemed in 24 hours across major decentralized finance (DeFi) venues and only minor price deviations elsewhere. At the time of writing, USDe is trading at $0.9987, according to data from CoinMarketCap.
The crypto market crash on Oct. 10 was the largest liquidation event in the crypto market’s history. More than $19 billion in crypto positions were liquidated, according to CoinGlass data, leading to a $65 billion decline in open interest.
Related: Crypto.com CEO Urges Probe After $20B Liquidations
Crypto market activity stalls
Since the crash, broader market activity has also thinned. Crypto trading volumes are down roughly 50%, while US-listed spot Bitcoin exchange-traded funds (ETFs) have seen about $5 billion in net outflows since late October.
10x Research said that the current weakness is less about retail capitulation and more about a deliberate pullback by regulated capital. As leverage and liquidity retreat, Bitcoin (BTC) has decoupled from both equities and gold, trading more like an isolated risk asset than a macro hedge.
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