Crypto News

TUSD Faces Depreciation Amidst Heavy Liquidation And Binance Announcement

TrueUSD (TUSD) experienced a significant depreciation, dropping to as low as 97 cents, triggered by reports of traders liquidating over $300 million worth of the stablecoin, according to data from Binance.

Binance’s announcement on January 15 about farming $MANTA by staking $BNB and $FDUSD, excluding $TUSD, played a pivotal role in the depreciation. Subsequently, TUSD holders engaged in selling, causing the stablecoin to depeg.

Analyzing Binance trade data, it’s evident that a majority of TUSD orders are substantial, indicating that significant holders, often referred to as whales, are actively selling the stablecoin. The net outflow over the last three days amounted to -$337 million.

On-chain data further revealed a substantial decrease in TUSD’s total circulation over the last two months, witnessing a decline of $1.4 billion (-43%) to $1.881 billion. Remarkably, 90.4% of the circulating supply, equivalent to $1.7 billion USD, is held by Binance, as per Arkham statistics.

Notable TUSD Transfers To Monitor

In response to TUSD’s depegging, an inactive whale, dormant for approximately 560 days, deposited $2.5 million in TUSD to Binance, potentially reallocating it to other stablecoins.

Notably, two whales, including Justin Sun, have initiated purchases of TUSD with the aim of restoring the stablecoin’s peg. Whale “TT2T17” (presumed to be Justin Sun) burned 104 million TUSD, deposited 200 million USDT to Binance, and withdrew 139.56 million TUSD from the platform. 

Another whale, “TGiwro,” withdrew $31.6 million USD from Binance, utilized it in JustLend, and took out a loan of $18.97 million (USDT), subsequently depositing it back into Binance.

Examining TUSD’s reserves, the collateral ratio stands at 101.16%, with a total supply of $1,911,764,530 and escrowed collateral amounting to $1,933,973,827.

Key components of the escrowed collateral include US Treasury Bills, First Digital Trust Limited holdings, and US Dollars Cash.

This complex series of transactions and events has contributed to the volatility and challenges faced by TUSD in maintaining its peg.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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Image Source: sirinapa/123RF // Image Effects by Colorcinch

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