Huobi’s Market Share Is Declining Due To The USD Depeg – Jan 11,2023

Key Points:

• Huobi Global, a cryptocurrency exchange with its headquarters in Seychelles, has been having issues for a while, which has resulted in it losing a sizable portion of the market.
• Huobi was the most significant loser of the crypto bear market, according to the most recent report by data source Kaiko, as its market share dropped from 22% in 2020 to a meager 4% by 2022’s end.
• The USDD depeg also proved Sun’s crypto empire’s weak point. To put things in perspective, USDD, which was released by the Tron DAO Reserve, intends to control the value of stablecoins that are printed on the TRX blockchain.

Huobi Global, a cryptocurrency exchange with its headquarters in Seychelles, has been having issues for a while, which has resulted in it losing a sizable portion of the market.

The business has drawn criticism for, among other things, purportedly closing off internal communication and feedback channels and withdrawing several employee benefits. Competing businesses are also a threat to its market share.

Huobi was the most significant loser of the crypto bear market, according to the most recent report by data source Kaiko, as its market share dropped from 22% in 2020 to a meager 4% by 2022’s end. Additionally, Huobi’s quarterly earnings decreased by about 98% since 2021 Q2.

The FTX empire’s dramatic collapse left the crypto sector in disarray, and the community is on guard against other negative occurrences involving other prominent players. Huobi is the most recent company to experience a confidence issue.

It saw token outflows of more than $100 million in the past week alone amid insolvency worries. To increase confidence, Justin Sun, the founder of Tron and a significant shareholder in the cryptocurrency exchange, shifted USDC and USDT worth about $100 million from Binance to Huobi.

The USDD depeg also proved Sun’s crypto empire’s weak point

To put things in perspective, USDD, which was released by the Tron DAO Reserve, intends to control the value of stablecoins that are printed on the TRX blockchain.

The depeg was triggered by the FTX collapse, and since then, it has continued to hover below the $1 mark.

Despite USDD being claimed to be backed with a collateral ratio of over 200% in combination with Tron, Bitcoin, USDC, and USDT, it has failed to regain its peg. At the time of writing, USDD was trading around $0.97.

Kaiko’s research stated:

“When looking at USDD-USDT order books, which is the highest volume trading pair, we can observe that market depth on the bid and ask side has been persistently imbalanced since early December.”

Additionally, it was discovered that the ratio of bids to asks had been below 1 for the majority of the previous month, a pattern that indicated intense selling pressure that was bringing the price down. Since the beginning of the year, the ratio has somewhat improved, and the bid/ask ratio has risen over 1, indicating that more bids have been placed on order books.

Only in the event of a change in order book structure will the existing sentiment change. USDD can still reclaim its peg, according to Kaiko’s research. Huobi, on the other hand, continues to confront an “uphill challenge in regaining market share,” therefore, this isn’t the case for them.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.

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