A US dollar-backed stablecoin associated with former President Trump experienced unusual price volatility, briefly falling below its one-dollar peg to approximately $0.994, about 0.6% below its intended value. According to CoinGecko data, this decline was temporary but raised concerns within the market. Stablecoins are typically used to provide stability in the cryptocurrency market by pegging their value to a stable asset like the US dollar, minimizing price fluctuations. Stakeholders and market experts have described this unexpected drop as the result of a “coordinated attack,” a claim made by the US-based stablecoin WLFI. WLFI expressed concerns about security and stability, alleging that their systems were under hacking or financial assault, which caused the price instability. The primary purpose of stablecoins is to ensure price stability within the crypto ecosystem to protect investors from financial losses. However, deviations from the pegged value can undermine market confidence and negatively impact the broader cryptocurrency market. Such incidents can increase market volatility and signal investors to exercise caution. Experts warn that these attacks may question the integrity of stablecoin systems and could affect the valuations of other crypto assets. Immediate action by relevant authorities and companies is necessary to resolve the issue and restore confidence in the market.
Source: coindesk
