Ethena Protocol Shows Market Volatility Trends
Ethena emerged as one of the most affected protocols following the October market crash, as sharp outflows from its yield-bearing stablecoin USDe significantly reduced the platform’s total value locked (TVL). Data shows Ethena’s TVL fell by nearly half, declining from $14.8 billion to $7.4 billion, with USDe accounting for most of the contraction.
Investor withdrawals from USDe intensified during the sell-off. In October alone, $5.7 billion was redeemed from the stablecoin, and the trend extended into the following two months, bringing total outflows to approximately $8 billion. Market observers noted that USDe was particularly vulnerable during the crash, as liquidation pressure was partly linked to its temporary depegging on Binance, which amplified selling activity.
USDe Loses Ground to Rival Stablecoins
A closer look at yield-bearing stablecoin markets shows that outflows were heavily concentrated in USDe. Over the past 90 days, while USDe experienced sustained redemptions, competing products such as Sky’s sUSDS and Maple’s syrupUSDC recorded notable inflows. This shift suggests that capital rotated away from Ethena’s stablecoin toward perceived alternatives offering similar yield structures.
ENA Drops 62% as Select Buyers Step In
The broader risk-off sentiment also weighed on ENA, Ethena’s native token. Following a liquidation cascade, ENA declined by 62%, losing roughly $0.50 and falling below $0.20 during the fourth quarter. Trading activity weakened sharply, with on-balance volume (OBV) falling to record lows, reflecting subdued market interest amid a bearish environment.
Despite the downturn, some market participants began accumulating ENA at lower price levels. Blockchain data showed that ENA supply held outside exchanges increased during the decline, signaling dip buying activity.
Notably, BitMEX founder Arthur Hayes shifted exposure into what he described as “high beta DeFi assets,” including ENA. According to Lookonchain data, Hayes acquired 1.22 million ENA, valued at approximately $257,500.
Overall, while USDe has yet to show signs of a strong recovery, ENA experienced selective accumulation during the downturn, highlighting diverging investor behavior following the October 10 market crash.
