Su Zhu: The emergence of Ethena may lead to a deeper pullback in ETH, but a quicker rebound

ChainCatcher message, Su Zhu stated on X platform that Ethena has created an interesting dynamic. Under normal circumstances, if people choose to hold spot positions and short contracts for funding rate arbitrage, when the rate returns to neutral, they may start covering contracts and going long again. However, due to the existence of Ethena, some positions have now been pledged and converted into dollars (referring to a portion of spot and futures shorts being collateralized in a combined form to mint USDe). This may mean that ETH will experience deeper pullbacks and faster rebounds.

Note: Ethena Labs is the development team behind stablecoin USDe. The unique feature of USDe is that its collateral assets are composed of an equal amount of spot ETH and short positions in futures ETH.