TrueUSD (TUSD) Depegs To $0.9712, Here’s Why

Coingapestaff
January 18, 2024
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TrueUSD Depegs To $0.9712, Here's Why.

TrueUSD (TUSD) recently experienced a significant de-pegging, plummeting to $0.9712 from its stable value. This comes after TUSD earlier dropped to $0.98. The root cause of the stablecoin’s plunge can be traced back to Binance‘s announcement on Monday, January 15.

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Why Did TrueUSD Depeg To $0.97?

On Monday, Binance announced plans for farming Manta (MANTA) tokens by staking BNB and FDUSD in its latest Launchpool. It excluded TUSD, which had earlier been a staking option for all Binance Launchpools. This prompted holders to swiftly offload their TUSD holdings.

In addition, Binance trading revealed that sizable TUSD orders were executed by whales, which acted as a primary catalyst in the de-pegging. Over the past three days, a staggering $337 million inflow was recorded, signaling a substantial sell-off by these influential players.

Furthermore, on-chain data further highlights the tumultuous journey of TrueUSD. The circulating supply witnessed a drastic 43% reduction, plummeting by 1.4 billion TUSD in just two months. Moreover, data from Arkham shows that Binance wallets hold 1.7 billion TUSD, representing a whopping 90.4% of the circulating supply.

The aftermath of the depegging saw a dormant whale, who was inactive for approximately 560 days depositing 2.5 million TUSD into Binance. It might be a move to relocate his investment into other stablecoins. Whilst, in a bid to rectify the situation, whales, including prominent figure Justin Sun, initiated efforts to stabilize TrueUSD.

The whale ‘TT2T17’, suspected to be Justin Sun, burned 104 million TUSD after the de-pegging. Additionally, he deposited 200 million USDT into Binance and withdrew 139.56 million TUSD. Whale “TGiwro” followed suit by withdrawing 31.6 million TUSD from Binance, depositing it into JustLend. He then borrowed 18.97 million USDT from JustLend and deposited it into Binance.

Also Read: Binance Delists BTC, ETH, BNB Spot Trading Pairs But Here’s The Catch

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About TUSD Reserves & Recovery After Depeg

Analyzing the reserves, the collateral ratio stands at 101.16%, with TUSD supply amounting to $1.9 billion. Moreover, the escrowed collateral of $1.93 billion includes significant holdings in US Treasury Bills, First Digital Trust Limited, and USD Cash.

At press time, the TrueUSD price was seen nearing its stable value of $1. It traded at $0.9905, gaining 0.35% in value on January 18. Whilst, its market cap stood at $1.89 billion. Moreover, its 24-hour trade volume soared by 50.43% to $412.38 million.

On the other hand, First Digital USD (FDUSD), TrueUSD’s rival, had been trading at a premium since the Manta Launchpool. It reached a high of $1.0043 on the day the announcement was made. However, the TUSD price continued declining before stabilizing significantly today.

Also Read: Tether Forms Strategic Alliance with Rhino.fi for Enhanced Liquidity

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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
CoinGape comprises an experienced team of native content writers and editors working round the clock to cover news globally and present news as a fact rather than an opinion. CoinGape writers and reporters contributed to this article.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.