DeFi
World Liberty Financial’s USD1 Stablecoin Sheds Over $400 Million in Market Cap Amid Redemptions
World Liberty Financial’s USD1 stablecoin saw its market capitalization decline by more than $400 million over roughly two weeks, falling from about $4.43 billion on October 6 to approximately $4.02–$4.03 billion by October 19, 2026 (CoinGecko data), a roughly 9.1% drop. The decline was driven by large redemptions and corresponding token burns on Ethereum and BNB Chain, reducing circulating supply while the token’s price remained near its peg.
On-chain analysis from Onchain Benchmark indicated nearly $184.6–$185 million in net redemptions on Ethereum (across dozens of burns) and about $200.4 million on BNB Chain between early and mid-October. A significant portion of the BNB Chain activity—roughly $200 million—was linked to a single unidentified address, with transfers occurring in large batches. Supply on Solana remained relatively stable and did not offset the contractions elsewhere. USD1 maintained its peg, trading between roughly $0.998 and $1.00 without sustained depegging. World Liberty Financial’s proof-of-reserves figures tracked near $4.01 billion during the period.
The episode highlights concentration risks and redemption dynamics in newer stablecoins even as the overall stablecoin market continues expanding. Redemptions on Ethereum were heavily routed through BitGo-labeled infrastructure (USD1’s issuer and custodian), while the BNB Chain flows showed extreme concentration from one source. No major cross-chain transfers fully explained the net supply reduction. Market observers noted that a token of this size can see nearly 10% of supply move via a limited number of channels in a short window, underscoring holder concentration even when the peg holds.
USD1 remains a fiat-backed stablecoin issued under World Liberty Financial, with reserves reported against outstanding supply. The recent contraction occurred against a backdrop of broader stablecoin growth but illustrated how large redemptions can quickly reduce market capitalization for newer issuers.
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The rehabilitation trustee for the collapsed Mt. Gox exchange pushed the creditor repayment deadline to October 31, 2027, with Tokyo court approval. A notice dated October 16 from trustee Nobuaki Kobayashi extended the previous October 31, 2026 deadline by one year. Many creditors have still not completed the required procedures, while others have encountered processing issues that prevented payments.
Base repayments, early lump-sum repayments, and intermediate repayments have largely been completed for eligible creditors who finished the necessary steps and experienced no problems. The extension covers these three repayment categories under the rehabilitation plan. This is the fourth annual one-year extension since the original 2023 deadline. Repayments began in July 2024 through intermediaries including Kraken, Bitstamp, and BitGo, with more than 19,500 creditors reported as having received distributions by March 2025.
Wallets linked to the estate continue to hold approximately 34,388 BTC (roughly $2.8 billion at current prices), according to blockchain analytics data. The remaining balance has been relatively stable in recent months, with no major transfers reported since June. Analysts view the outstanding supply as limited relative to today’s Bitcoin liquidity and trading volumes, and no longer a major market overhang compared with earlier stages of the process when larger amounts were still pending.
The original rehabilitation plan covered roughly 142,000 BTC, 143,000 BCH, and ¥69 billion in cash. The latest delay provides additional time to complete remaining distributions where practicable, further postponing any potential incremental supply from the estate.
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