First Digital USD ($FDUSD), a well-known stablecoin pegged to the USD, has witnessed a brief loss of peg. As per the data from Lookonchain, $FDUSD has recently plunged to $0.8726, resulting in huge withdrawal by Wintermute, a popular crypto market maker platform. The on-chain data firm provided the details of this incident in a recent X post.
$FDUSD Depegs Amid Prevailing News of Issuer’s Bankruptcy
The data highlights that the $FDUSD stablecoin has seen an abrupt dip in its value, surprising the crypto market. In this respect, the stablecoin slumped to $0.8726 following the spread of news concerning the bankruptcy of its issuer. On this, Wintermute seized the arbitrage opportunity and withdrew funds.
In line with the on-chain data, the following this sharp decline, $FDUSD recovered. Over the past twenty-four hours, the price performance of the token has been oscillating between $0.8726 and $0.9984. Currently, the stablecoin is changing hands at nearly $0.9877, denoting a 1.06% dip over the recent 24 hours. In line with the order book, a huge sell order volume has driven the price downward. This situation was potentially escalated by the wider panic selling. Nevertheless, considerable buy orders at the lower end assisted the stablecoin to reclaim its peg within a short time.
Wintermute Leverages Opportunity to Withdraw $FDUSD in Large Amounts
According to Lookonchain, as soon as the $FDUSD stablecoin got depegged, Wintermute leveraged the incident to withdraw 31.36M tokens. The platform performed this extraction on Binance in several transactions. Hence, within one hour, Wintermute transferred big $FDUSD amounts to its wallets. This whole development indicates stablecoins’ vulnerability to sudden market shocks, specifically those associated to market uncertainties. Although $FDUSD saw a rapid recovery, the event raises questions about the stablecoin’s long-term viability and stability.
