- This is the deepest that TUSD has fallen since its launch.
- Outflows of nearly $128 million were recorded from Binance in the last 24 hours.
In a shocking turn of events, the fifth-largest stablecoin, True USD [TUSD], fell below its ideal $1 peg as the ghosts of depegging returned to haunt the market yet again.
TUSD goes below $1
According to AMBCrypto’s analysis of CoinMarketCap, TUSD started slipping below the peg on the 15th of January at 11 am UTC and dropped as low as $0.984 by 11:15 pm UTC.
Notably, this is the deepest that TUSD has fallen since its official launch nearly six years ago.
Source: CoinMarketCap
TUSD being ditched in favor of USDT?
As the news of the depegging came pouring in, market observers noticed a surge in sell orders for TUSD on top cryptocurrency exchange Binance [BNB].
To verify these assertions, AMBCrypto turned to DeFiLlama. Indeed, TUSD outflows of nearly $128 million were recorded from the exchange in the last 24 hours.
Notably, USDT saw a significant increase in capital around this time, prompting participants to believe that TUSD was being redeemed in favor of the king of stablecoins.
Source: DeFiLlama
Concerns around TUSD started to surface over difficulties in accessing real-time attestations of its reserves, potentially meaning that the stablecoin was under-collateralized.
For the uninitiated, this is a risk, as it suggests that there may not be enough collateral to honor redemptions during a crisis.
Binance giving the cold shoulder?
TUSD’s exclusion from Binance’s latest MANTA launchpad raised eyebrows as well.
Notably, the launchpad rewards new tokens to investors that lock up assets for a specific period. With no choice for TUSD, holders may have begun to redeem it for Binance’s new favorite, FDUSD.
TUSD was propped up by Binance in March following the downfall of Binance USD due to regulatory oversights. Binance began aggressively marketing TUSD, aided by its successful zero-fee trading program.
However, as things turned out, Binance removed the zero-fee promotion for the aforementioned pair in early September.
While a plausible reason behind the move was not yet clear, rumors of exposure to the bankrupt crypto custodian Prime Trust did the rounds for a while. TUSD’s market cap has since plummeted, while FDUSD has grown in the same period.
It was becoming clear that Binance turned its attention fully towards FDUSD.
Source: Glassnode
