This Exchange-Linked Stablecoin Losing Its $1 Fixed Price Causes Concern!

Cryptocurrency stablecoin associated with exchange Huobi HUSD, It briefly diverged from the $1 level it should have been and declined to $0.90.

HUSD is a central stablecoin. Ethereum It functions as an ERC-20 token that tracks the price of over US dollars and has an estimated market cap of around $187 million.

HUSD Stablecoin Drops To $0.90 And Rebounds

According to CoinGecko data, the stablecoin’s price dropped as low as $0.90 in the early hours.

Although often associated with the Huobi Global crypto exchange, HUSD’s operations are controlled by a Hong Kong firm, Stable Universal. In 2019, Huobi’s venture arm, Huobi Capital, made an investment in Stable Universal.

This is not the first time that HUSD has lost parity with the dollar. A temporary decrease to a similar level took place in August as well.

At the time, the exchange blamed liquidity issues for the stablecoin’s volatility and announced that it had “decided to close several accounts in certain regions to comply with legal requirements.” However, this time, the company has not made a statement yet.

While it is not immediately clear why the stablecoin lost the dollar pair, it may be due to Huobi Global’s decision to delist 21 HUSD trading pairs without providing a clear explanation.

HUSD delists on Huobi may have hurt the stablecoin’s market sentiment and led to market sell-offs.

As reported by security firm PeckShield, the most notable HUSD sale was tagged Alameda Research on Etherscan, which pulled 70,000 HUSD from Huobi on Monday, then Curve on the decentralized exchange DAI, USDT and USDC It came from an address that reportedly exchanged 50,000 HUSD for other stabkecoins.

Unlike stablecoins, which derive their value through an algorithm or cryptocurrency collateral reserves, HUSD is allegedly backed by cash reserves held by Stable Universal.

*Not investment advice.