Ethena’s USDe Plunges $8.3B Post-October Crash as Confidence Evaporates

Another 'stable' asset proves anything but. Ethena's flagship synthetic dollar, USDe, just shed a staggering eight-point-three billion dollars in market cap. The October collapse wasn't just a blip—it was a breaking point.

The Trust Vacuum

Markets have a long memory, especially for failures. When a protocol designed for stability buckles under pressure, the flight of capital isn't a surprise—it's a foregone conclusion. The numbers tell the story of a rapid, brutal loss of faith.

Rebuilding on Shaky Ground

Recovery in crypto hinges on one fragile commodity: belief. Regaining it requires more than just technical patches; it demands a fundamental restoration of credibility. The path back for USDe isn't about marketing—it's about proving resilience under real-world fire.

In the end, this is finance's oldest lesson, wrapped in a new digital package: you can engineer a token, but you can't engineer trust. Once it's gone, even eight billion dollars can disappear faster than a trader's profits in a leveraged long.

TLDR

• Ethena’s USDe saw $8.3B in outflows, losing nearly half its market cap since October’s crash.
• USDe’s market cap dropped from $14.7B to $6.4B in just two months after October 10 crash.
• USDe briefly depegged to $0.65 due to an oracle issue, but stabilized around $0.9987.
• Crypto market lost $1.3T in value post-October crash, with trading volumes down 50%.

Ethena’s synthetic stablecoin, USDe, has experienced a sharp decline in market value since the major crypto market crash on October 10. The stablecoin, which relies on synthetic collateral models, has seen $8.3 billion in net outflows as investors have withdrawn due to growing concerns over leveraged and synthetic collateral systems. USDe’s market cap has been cut nearly in half, reflecting a broader trend of investor caution in the aftermath of the crash.

Market Value Decline and Loss of Confidence

USDe’s market cap stood at approximately $14.7 billion just before the October 10 crash, but it has since dropped to about $6.4 billion. This decline occurred in just over two months, as investors pulled back from the token amid growing concerns over its synthetic collateral model.

Analysts from 10x Research pointed out that the market crash marked a turning point, transitioning from a bullish phase to one characterized by deleveraging. The market crash erased $1.3 trillion in total market capitalization, or nearly 30% of the crypto market’s value at the time.

After Crypto’s October 10 Crash: Are We Entering the Final Stage of Deleveraging?

October proved to be the most consequential month for Bitcoin in 2025, marking the point at which the bull market decisively turned bearish amid a convergence of overlapping shocks.

Understanding… pic.twitter.com/W6iAKdCAA3

— 10x Research (@10x_Research) December 23, 2025

The loss of confidence in Leveraged and synthetic collateral has been a significant factor in USDe’s decreased market cap. As the market stabilized after the crash, investors became increasingly wary of these models, and many sought safer, more traditional investments. The continued retreat from USDe indicates a shift in investor sentiment, driven by the volatility and risks associated with synthetic assets.

USDe’s Temporary Depeg and Market Stability

Following the October crash, USDe briefly lost its peg and dropped to about $0.65 on Binance. This deviation from its expected value was attributed to an internal oracle issue at the exchange, not to problems with USDe’s underlying collateral or protocol. 

According to Guy Young, the founder of Ethena Labs, USDe’s minting and redemption functions remained operational during the crash. Over $2 billion in USDe was redeemed across major decentralized finance (DeFi) platforms within 24 hours, with only minor price deviations elsewhere.

USDe just depegged all the way down to $0.65 vs USDT and $0.62 vs USDC during today's crash. And it's still sitting at $0.97 against USDC.

The reality is that you just can't use synthetic dollars as payment assets, nor as collateral for a payment asset (by wrapping it). It's not… pic.twitter.com/sSJPMmEjAC

— Nass Eddequiouaq (@nassyweazy) October 10, 2025

At the time of writing, USDe is trading close to its original value of $1, with a price of $0.9987, as per CoinMarketCap data. Despite the brief depeg, USDe has largely stabilized, indicating that the underlying mechanics of the stablecoin remained intact during the crash. However, the brief instability has contributed to the erosion of investor confidence, especially in synthetic stablecoins.

Broader Market Impact and Reduced Activity

The October crash, one of the largest liquidation events in the history of the crypto market, had a Ripple effect across the industry. More than $19 billion in crypto positions were liquidated, leading to a $65 billion decline in open interest. This event caused broader market activity to slow down significantly. Since the crash, crypto trading volumes have decreased by about 50%, reflecting the reduced participation from traders and investors.

In addition, bitcoin exchange-traded funds (ETFs) listed in the U.S. have seen approximately $5 billion in net outflows since late October. Analysts have noted that the current weakness in the market is less about retail investor capitulation and more about a deliberate pullback by regulated capital. 

As leverage and liquidity have decreased, Bitcoin has decoupled from traditional assets like equities and gold, behaving more like a high-risk asset than a macro hedge. This shift has further underscored the ongoing adjustments in the broader crypto market in response to recent events.