USDe Maintains Stability Amidst Market Turmoil, Crosses $6B Market Cap as Tariff Fears Grip Crypto Market
Ethena’s synthetic stablecoin, USDe, has weathered the storm of rising market volatility driven by the ongoing trade war threats from the White House. Despite the broader market downturn, USDe has managed to maintain its $1 peg and saw its market capitalization rise to over $6 billion, a substantial increase from the $5.7 billion recorded just a week ago.
USDe stands apart from traditional stablecoins like USDC due to its synthetic nature. Instead of being backed directly by fiat currency, USDe leverages a collateralized basket of stablecoins and implements cash-and-carry hedging strategies, including large futures positions, to maintain its stability. This approach has proven effective as USDe managed to stay close to its $1 peg throughout Monday’s trading session, with only minor fluctuations to $0.999.
The market cap of USDe has seen a significant jump, now surpassing $6 billion. This marks a notable milestone, particularly as the crypto market grapples with new tariffs being imposed by the U.S. on key trading partners. The global market turmoil surrounding these tariffs has made many investors more risk-averse, but USDe’s yield-bearing structure has provided a safe haven. With an annual percentage yield (APY) of 10%, the stablecoin has attracted both risk-averse traders and long-term investors looking for stability amid uncertain times.
On-chain data suggests that USDe’s positive funding rate is helping to preserve its peg, reflecting a market sentiment that is slightly bullish. A positive funding rate means that long-position holders are paying a small fee to short-position holders, an indication that the market believes the token will continue to maintain its value despite broader market fluctuations.
The stability of USDe is further supported by Ethena’s growing reserve fund, which now stands at $46.6 million as of Q4 2024. This growth has alleviated earlier concerns regarding the sustainability of the reserve and reinforced investor confidence in the token.
Investors are increasingly viewing USDe as a reliable store of value in the crypto space. Arthur Hayes, the CIO of Maelstrom and former BitMEX CEO, revealed that his firm has significantly increased its exposure to USDe, while reducing holdings in more volatile altcoins. Hayes noted that his firm plans to capitalize on future dips in the market, positioning itself with ample liquidity for strategic purchases in both Bitcoin and select altcoins.
