Key Points
- •Ethena’s USDe depegged to $0.65 amidst crypto liquidation chaos.
- •Event triggered $19B in liquidations across markets.
- •Impacts highlight vulnerabilities in synthetic asset models.
In October 2025, Ethena's USDe stablecoin lost its USD peg on Binance, dropping to $0.65 due to market turmoil and a crypto liquidation cascade.
The depegging incident underscores risks inherent to stablecoin structures, impacting governance tokens and market stability, and prompting regulatory scrutiny and protocol evaluations globally.
Ethena's USDe stablecoin faced a significant crisis in October 2025. The token, pegged to the US dollar, fell to $0.65 on Binance during a cascading $19B crypto liquidation.
The Ethena team noted the de‑pegging event resulted from market chaos and liquidation pressures. However, USDe assets maintained over‑collateralization to combat these fluctuations.
Cascading liquidations affected 1.6 million traders globally, marking widespread effects across crypto markets. BTC and ETH pricesexperienced severe drops alongside stablecoin volatility.
The financial landscape saw large‑scale asset devaluations, while regulatory bodies considered tighter controls on stablecoin models. US and EU laws proposed stricter measures post‑incident.
Markets witnessed a dramatic shift in volatility. The event spotlights questions on the robustness of synthetic stablecoins. ENA governance token also dropped by 43% within a day, reflecting investor concerns.
Analysts pointed to funding imbalances and systemic risks inherent in yield‑bearing stablecoins. Historical precedents such as Terra's collapse provide context, emphasizing vulnerabilities in algorithmic mechanisms under stressed conditions.
Ethena (ENA) has stated that its issuance and redemption functions for the USDe stablecoin are operating normally, following a de‑pegging event that saw the token fall to as low as $0.65 on Binance. The incident occurred around 9:30 p.m. UTC on Oct. 10. According to Ethena, the price fluctuation was caused by market turmoil and cascading liquidations, but its assets remain over‑collateralized.