Recent Bitcoin Crash Has Put $1B in sUSDe Loop Trades at Risk, Research Firm Says
Update: 2025-10-29
Description
DeFi Market at Risk: SusDe Loop Trade Unravels Post-Crypto CrashThe October 29th podcast delves into the ongoing impact of the crypto market crash on decentralized finance (DeFi), focusing on the risky sUSDe loop trade. With nearly a billion dollars in DeFi positions tied to Ethena's staked USDe at risk, traders are facing a negative yield spread, causing losses instead of profits. If this situation persists, it could lead to a billion-dollar unwinding of positions on lending protocols like Aave, potentially triggering cascading liquidations and exacerbating price problems. Traders must closely monitor utilization rates and yield spreads to avoid forced sell-offs and reduced market activity.
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