The fourth-largest stablecoin supported by the Binance exchange, TUSD, has started to raise alarms after losing its $1 peg, reminiscent of the UST crash that instilled significant fear among investors. With panic selling, further losses below $1 are not out of the question.
In the past hour, TUSD has been drifting away from its expected $1 value, having dropped to $0.9947 at the time of writing. For holders of large amounts of TUSD, even a $0.005 drop is not negligible, and any deviation from the $1 peg is concerning, regardless of the loss magnitude.
Experts have noted that TUSD’s current trading price on Binance at $0.9955 is due to Launchpool whale arbitrators exiting their TUSD positions, coupled with banks being closed for Christmas. They clarify that this information is not FUD or financial advice, but merely a price reminder.
The risk remains low as long as the price does not fall below $0.99 and continues to attract demand at that level. However, if it is used for speculative purposes to profit from massive short positions, as was seen during the UST era, this could serve as an early warning.
Investors should regularly monitor their risks and conduct their own research to stay informed and prepared for any potential market movements.