As a result of the sudden events, the stability of the TrueUSD (TUSD) stablecoin traded on the Binance exchange is under scrutiny as it has been de-pegged, experiencing a significant deviation from its stable level of $1. Reports indicate that holders have transferred hundreds of millions of TUSD in favor of rival stablecoin Tether (USDT). This comes against the backdrop of recent crises, including difficulties in providing real-time confirmations of reserves and concerns about inadequate collateralization.
Binance sell-off triggers TUSD depeg
TrueUSD, the Justin Sun-linked stablecoin, suffered a notable decline below its $1 stable level, falling as low as $0.984. The depegging, which started around 15:00 UTC on January 15, intensified during the selling frenzy on Binance. At the time of publication, TUSD is trading at $0.988, reflecting a 1.3% deviation from the targeted constant. The sell-off on Binance caused traders to cash out $339.2 million worth of TUSD in the last 24 hours, exceeding buy orders by $42.3 million. This increased activity raises concerns about the stability of the stablecoin and raises questions about reported difficulties in providing real-time confirmations of reserves.
Massive sell-offs in the Binance exchange are causing panic among TUSD holders, who are grappling with uncertainties regarding reserves and the recent instability linked to the Poloniex hacking incident. The discrepancy between sell and buy orders signals a challenging situation for TrueUSD, potentially eroding confidence in the stability of the USD-pegged stablecoin. The decline in the value of TrueUSD below the $1 constant is not specific to Binance alone, the decline is also seen on other platforms. According to the data, TrueUSD is currently trading around $0.985215, with a low of $0.9837. The net outflow on Binance’s TUSD-USDT pair stands at $66.1 million, further highlighting the panic among investors.
What do experts say?
ContentFi Labs COO Nick Ruck attributes the large sell-off to uncertainties regarding TrueUSD reserves and the effects of the Poloniex incident. The recent attack on Poloniex appears to have created a ripple effect affecting TUSD holders’ confidence and triggering a shift towards more stable alternatives. Justin d’Anethan, Head of APAC Business Development at Keyrock, suggests that recent announcements such as Binance’s launch pool program may contribute to the move away from TUSD. The need to stake BNB or FDUSD for certain programs may have led investors to re-evaluate their holdings, adding to ongoing challenges for TrueUSD.
Binance’s influence on TrueUSD becomes even more evident as the exchange introduced its 44th Launchpad project, Manta, without including TUSD in its list of stakeable cryptocurrencies. Instead, BNB and FDUSD take priority in the project, causing dissatisfaction among users and potentially affecting market dynamics. Following Binance’s decision to not include TUSD in Manta’s stakeable assets, the price of the token also reflected and dropped to $0.99 amidst the selling pressure. While not a significant drop, the fact that TUSD did not touch this level last year raises doubts and highlights the impact of recent developments on the stablecoin’s value.
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