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Alarms have started to ring for TUSD, the fourth-largest stablecoin supported by the Binance exchange, after it lost its $1 peg, which had previously caused significant fear among investors when UST plummeted to zero. Now, panic selling could lead to deeper losses below $1.
Why Is TUSD Falling?
For the past hour, TUSD has been drifting away from its expected $1 value. At the time of writing, it has fallen to $0.9947. If you hold $1 million in TUSD, a $0.005 drop is not negligible, and any deviation from the $1 peg is concerning, regardless of the loss size. Experts have written the following about the current situation;
“TUSD is currently trading at $0.9955 on Binance, due to Launchpool whale arbitrators exiting their TUSD positions + Banks not operating during Christmas. This is not FUD or financial advice, just a price reminder.”
As long as the price does not fall below $0.99 and continues to see demand at that level, the risk remains weak. However, if someone uses this for speculation to profit from massive short positions, as happened during the UST period, this could be an early warning. Investors should regularly follow up on risks and conduct their own research.
