The cryptocurrency market faced unprecedented turmoil on October 10, 2025, when a flash crash triggered the largest liquidation event in digital asset history, wiping out over $19 billion in leveraged bets. This event surpassed the scale of the FTX collapse, with funding rates plunging to their lowest levels since the 2022 bear market, highlighting extreme volatility and systemic stress.
Amid the chaos, several stablecoins experienced severe dislocations. Ethena's synthetic dollar, USDe, briefly lost its peg, plummeting to $0.65 on Binance and exposing vulnerabilities in algorithmic-backed stablecoins during high-stress conditions. The rapid evaporation of liquidity underscored the risks in leveraged trading environments.
In contrast, Ripple USD (RLUSD), introduced in December 2024, maintained its $1 peg throughout the sell-off, passing its first major stress test since launch. Market analysts attributed this stability to RLUSD's structure and institutional backing, which bolstered confidence amid widespread panic.
Following the crash, RLUSD advanced to become the 82nd largest cryptocurrency by market capitalization, with a valuation of $840.86 million, overtaking DeFi token Curve DAO (CRV). This rise reflected growing institutional and retail trust, reinforced by Ripple's recent strategic partnership with Bahrain's FinTech Bay to promote RLUSD adoption and Ripple Custody solutions in the Middle East, aiming to strengthen digital asset infrastructure in the region.
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