World Liberty’s
#USD1 stablecoin has lost US$400 million in market capitalization in two weeks. Its on-chain supply fell by approximately 11.4%, exceeding the declines seen in other stablecoins on the market over the same period, such as USDe, USDC, or USDT. Despite the strong wave of redemptions, the token has maintained its 1:1 peg to the dollar without any destabilizing depegging events.
Mass redemptions of stablecoins are usually driven by changes in yield strategies, profit-taking, or capital rotation into other assets within DeFi. The fact that USD1 absorbed redemptions of this magnitude without losing its peg shows that the protocol’s liquidity and reserve mechanisms worked effectively under selling/redemption pressure.
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According to CryptoQuant, Bitcoin holders who bought 6 to 12 months ago have almost completely stopped sending coins to exchanges, with their share of transfers falling from 40.4% in June to just 4.4%. This group is generally considered to consist of medium-term investors, or relatively strong hands. Those who bought 6 to 12 months ago are likely choosing to hold onto their assets in expectation that their value may rise, or are simply ignoring short-term volatility.
As bitcoins remain in personal wallets or cold storage, beyond the reach of immediate selling on exchanges, the supply available for sale on the spot market decreases, which could theoretically ease downward pressure if demand holds steady or increases.
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