Ethena stablecoin market cap plummets… $2.2 billion evaporated in a month

Ethena (ENA)'s synthetic dollar stablecoin USDe's market capitalization has reportedly evaporated by about $2.2 billion (approximately 3.2 trillion won) over the past month.

According to cryptocurrency market tracking platform CoinGecko on the 3rd (local time), USDe's market cap fell from $9.3 billion on the 1st of last month to $7.1 billion on the 30th of the same month, a decrease of $2.2 billion over one month. That amounts to a drop of nearly 24% in market cap over the past month.

Synthetic dollars like USDe are stablecoins that maintain a 1:1 value with the dollar by combining various financial products such as crypto derivatives. This contrasts with existing stablecoins like Tether (USDT) and Circle (USDC), which maintain a 1:1 value with the dollar by collateralizing traditional assets such as gold and U.S. Treasury bonds.

Cointelegraph reported that "unlike synthetic dollar stablecoins, the market caps of Tether and Circle increased by $1.3 billion and $600 million this month, respectively, showing a slight rise for fiat-backed stablecoins."

The 'de-pegging' incident that occurred in October appears to have affected USDe's market cap plunge. Earlier, USDe's price briefly fell to $0.65 on global cryptocurrency exchange Binance on October 11 this year. Although temporary, this broke the value of a stablecoin that is supposed to be fixed at $1. At the time, USDe was the world's third-largest stablecoin by market capitalization.