Ethena’s synthetic stablecoin USDe has seen its market capitalization nearly cut in half since the October 10 market crash, as investors move away from leveraged and synthetic collateral models amid declining confidence.
USDe has recorded roughly $8.3 billion in net outflows since the sharp liquidation event, according to a report by 10x Research. Analysts described the October sell-off as a major turning point for the crypto market, marking a shift from a bullish environment to widespread deleveraging. The crash wiped out an estimated $1.3 trillion in total crypto market value, close to 30% of capitalization at the time.
Unlike traditional stablecoins backed by fiat reserves, USDe relies on synthetic collateral and hedging strategies. Under the extreme market stress, this structure suffered what analysts called a “sharp loss of confidence.”
Data from CoinMarketCap shows that USDe’s market cap stood at nearly $14.7 billion on October 9. Just over two months later, it had fallen to around $6.4 billion, highlighting the scale of the pullback.
Temporary depeg after October crash
Following the October 10 liquidation event, USDe briefly lost its dollar peg and dropped to about $0.65 on Binance. Ethena Labs founder Guy Young said the incident was caused by an internal oracle issue at the exchange rather than problems with USDe’s collateral, protocol design, or redemption process.
Young noted that minting and redemptions continued to function normally during the turmoil, with roughly $2 billion redeemed within 24 hours across major decentralized finance platforms. Outside of Binance, price deviations were limited. At the time of writing, USDe was trading close to its peg at $0.9987, based on CoinMarketCap data.
The October crash was the largest liquidation event in crypto history. More than $19 billion in leveraged positions were wiped out, according to CoinGlass, contributing to a $65 billion drop in open interest across the market.
Broader crypto activity slows
Market activity has remained subdued since the crash. Overall crypto trading volumes are down by around 50%, while U.S.-listed spot Bitcoin ETFs have recorded roughly $5 billion in net outflows since late October.
10x Research said the current weakness reflects a strategic retreat by regulated and institutional capital rather than panic selling by retail investors. As leverage and liquidity continue to decline, Bitcoin has increasingly traded as a standalone risk asset, decoupling from traditional macro hedges such as equities and gold.
