Panic Sell in Ethena, $700 Million USDe Vaporized after xUSD and deUSD Crash!

Jakarta, Pintu News – The failure of two prominent stablecoins, xUSD and deUSD, has triggered a wave of panic in the cryptocurrency market, particularly in yielding stablecoins. Ethena, known for its USDe stablecoin, saw a massive $700 million withdrawal within a month.

This incident not only raised concerns about the stability of USDe but also affected the market value which plummeted by $5.4 billion since October 11, 2025. This marks one of the worst incidents in the history of the DeFi market.

Direct Impact on USDe

The large USDe withdrawals have exposed vulnerabilities in the yield model and delta-hedging strategy employed by Ethena. Investors began to lose confidence, triggering massive selling that led to a drastic drop in the USDe exchange rate. This was compounded by concerns that there would not be enough liquidity to handle the growing withdrawal demand.

As a result, many platforms that accept USDe as collateral began to feel significant liquidity pressures. The $5.4 billion drop in the market value of USDe not only reflects the loss of investor confidence but also highlights the vulnerability of the DeFi market to issues related to stability and security.

The failure of xUSD and deUSD has shown how quickly domino effects can occur in the crypto ecosystem, especially in supposedly stable instruments like stablecoins. This has forced market participants to reevaluate the risks associated with investing in yielding stablecoins.

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Market and Regulatory Implications

These failures have caught the attention of regulators around the world, who are now increasingly questioning the safety and sustainability of high-yielding stablecoin models. Regulators are beginning to consider new policies to address the risks associated with stablecoins and delta-hedging practices that are often not tested in extreme market conditions. This may include stricter capital requirements and greater transparency in stablecoin operations.

In addition, this incident has also affected platforms that use stablecoins like USDe as collateral. They will have to reassess their risk policies and may have to increase liquidity buffers in anticipation of large withdrawals. This failure also provides an important lesson on the importance of asset diversification and more careful risk management in crypto investments.

Also read: 5 Reasons Why Crypto Markets Are Up Today

The Future of USDe and Other Stablecoins

Although the stablecoin market is currently under pressure, this is not the end of stablecoin innovation or adoption. The lessons from this incident can help develop more robust and stable mechanisms for stablecoins in the future. Stablecoin developers and operators may need to focus more on long-term sustainability rather than chasing high yields that often come with greater risk.

The market may also see innovations in the form of stablecoins that are more decentralized or backed by real assets in a more transparent and verifiable way. This would help restore investor confidence and possibly spark a new wave of stablecoin adoption for more secure transaction and store-of-value purposes.

Conclusion

The USDe crisis and its impact on the wider crypto market shows how important caution is in financial innovation. While stablecoins offer many advantages, the risks associated with them must be managed very carefully to avoid negative impacts on investors and the wider financial system.

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities have high risk and volatility, always do your own research and use cold cash before investing. All activities of buying and selling bitcoin and other crypto asset investments are the responsibility of the reader.

Reference

• Coinfomania. Ethena USDE $700M Redemption Stablecoin Crash. Accessed on November 10, 2025
• Featured Image: Cryptonomist