DEPEGGED| HUOBI STABLECOIN LOSES USD PEG
Bitcoin has had its fair share of ups and downs in the last 24 hours as it is struggling to stay at 23k with a trading price of $23,091 and a trading volume of $23,753,098,009 USD (data as of the time of writing)
Although Prices aren’t at their best, the week seems bullish for several Cryptocurrencies, and some others having price troubles
From the look of the current market condition, Bitcoin isn’t the only Cryptocurrency having troubles today, The HUOBI Stablecoin too. The unique feature which makes Stablecoins different from every other Cryptocurrency is their ability to store value directly equivalent to the USD via a peg. It is unfortunate to realize that HUSD, the Stablecoin created by the HUOBI exchange has lost its store of value linked to the USD (United States Dollar) and hence depegged.
Let’s discuss Stablecoins for a moment:
Stablecoins are those Cryptocurrencies that have their value tied to a specific currency or financial instrument. USD is the more frequent yardstick for pegging Stablecoins to currency in the crypto space.
The problem of volatility is a major problem in the cryptocurrency space; resulting in frequent price fluctuations which are usually detrimental to investors and traders at large. Stablecoins were created to solve this problem for many Cryptocurrencies.
Huobi is a cryptocurrency exchange where users can buy and sell crypto including Bitcoin, Ethereum, and other tokens. The exchange provides liquidity through trading pairs like BTC/USDT and ETH/USDT. The crypto exchange launched its Stablecoin, HUSD in 2018 which was pegged to USD.
The ERC-20 Stablecoin has crashed, and this has led to it being depegged from the regular 1:1 ratio to the United States Dollar. The Stablecoin is currently trading at $0.95(at the time of writing) this is after it fell to $0.93. It is uncertain the reason behind this crash of a Stablecoin supported by a prominent crypto firm, Huobi.
The Huobi founder recently decided to sell his HUSD stake in for $3B, but the crypto exchange later refused the move.
Not long ago, a major Stablecoin crash and depeg in crypto were Terra. The Terra ecosystem suffered a hard crash when Terra Luna Crashed. This event was the very fall of Terra’s UST. Although Huobi exchange was one of the crypto platforms that helped champion Terra2.0’s resurrection, it is unfortunate it is going through a similar fate currently.