Amid Wall Street's continued anticipation of the expansion of "stablecoins," World Liberty Financial, known for its support from President Trump and his sons, announced that an "organized attack" targeting its dollar-pegged stablecoin, USD1, had failed. However, immediately after the rumors of the attack spread, the prices of the WLFI token and USD1 briefly fluctuated, and Bitcoin (BTC) also plummeted by over 4% in two hours, fueling market anxiety.
World Liberty Financial claimed in a post on X (formerly Twitter) on February 23 (local time) that “hackers, ‘paid influencers,’ and short sellers combined to ‘create’ chaos by shaking the USD1.” The company explained that during the attack, “several accounts belonging to WLFI co-founders were targeted, a ‘massive short position’ in WLFI tokens was created, and there was payment to spread fear, uncertainty, and doubt (FUD).”
World Liberty Financial: "USD1 Attack Failed…Temporary Defegation Recovers"
While rumors of an attack spread, the price of the WLFI token fell by approximately 7%. At the time of writing, WLFI was trading at $0.1128 (approximately 163 won). The USD1 also briefly fell to $0.994 (approximately 1,438 won), shaking the dollar peg (1 dollar = 1 token). However, it later recovered to above $0.999 (approximately 1,445 won).
World Liberty Financial emphasized that "USD1 is trading stably at par, based on a sound mint-and-redeem structure and 1:1 full collateralization," and that "no fraudster can shake the long-term commitment of the WLFI team and co-founders to USD1." This underscores the fact that the stablecoin's core "redemption mechanism" is functioning properly, limiting the impact of defeging.
Standard Chartered: "Stablecoin market to reach $2 trillion by 2028… Treasury bond demand forecast downgraded."
Meanwhile, Standard Chartered maintained its forecast that the stablecoin market will grow to $2 trillion (approximately KRW 2,893.6 trillion) by the end of 2028. However, it lowered its estimate for the increase in demand for U.S. Treasury bills (T-bills) that stablecoins will drive for reserve management.
Analysts Geoffrey Kendrick and U.S. interest rate strategist John Davies said in a report that “while the market capitalization of dollar stablecoins has stagnated at around $300 billion (approximately 433.8 trillion won) in recent months, this is not a structural problem but a cyclical factor,” and diagnosed that “the trend of institutional inclusion has strengthened since the passage of the U.S. ‘GENIUS Act’ in 2025.”
Standard Chartered projects that stablecoins will generate an additional $800 billion to $1 trillion (approximately KRW 1,157.4 trillion to KRW 1,446.8 trillion) in Treasury bill demand by the end of 2028. This represents a significant reduction from the $1.6 trillion (approximately KRW 2,314.9 trillion) forecast presented in April 2025. Nevertheless, the bank maintains its target for the stablecoin market size at $2 trillion, maintaining growth while adjusting for the spillover effect on government bond demand.
Bitcoin plunges 4% in two hours, fear index retreats to extreme levels
Market volatility also escalated in Bitcoin. Bitcoin fell more than 4% in two hours, falling to $64,300 (approximately 93 million won), wiping out all of its weekend gains. It touched $68,600 (approximately 99.23 million won) over the weekend, but selling pressure subsequently intensified, reverting to testing the lower support line of the trading range formed after the sharp drop to $60,000 (approximately 86.81 million won) on February 6th.
The derivatives market has been hit with a wave of forced liquidations. According to CoinGlass, approximately 136,000 traders liquidated their positions over the past 24 hours, totaling $458 million (approximately 662.6 billion won). Of these, 92% were leveraged long positions (bullish bets). This suggests that excessive leverage amplified the price decline.
Bitcoin is reportedly 5.5% below its 2021 bull market high of $69,000 (approximately 99.82 million won) and about 48% below its October all-time high of $126,000 (approximately 182.29 million won). Given the frequent movement of funds into "stablecoins" when risky assets fluctuate, the recent USD1 controversy and Bitcoin's plunge are likely to further increase market sensitivity to stablecoin trust and liquidity flows for the time being.
Why are rumors of stablecoin defeging shaking the entire market? The key is 'repayment structure' and 'leverage.'
Even stablecoins that emphasize "fully collateralized mint-and-redeem" like USD1 can experience price fluctuations with just a few hours of FUD and positioning bias (large short positions/excessive long positions).
What investors need to check at this time is not “who attacked”, but rather ① the quality of reserves/collateral, ② the operation of the repayment mechanism, ③ on-chain flow, and ④ the risk of leverage in the derivatives market .
This "structural understanding" isn't achieved through a few news lines. TokenPost Academy provides step-by-step training in data-driven decision-making and risk management , ensuring you remain unshaken by situations like the stablecoin controversy, surge in forced liquidations, and widespread market fear.
Step 2: The Analyst — How to verify, "Is this stablecoin really backed 1:1?"
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On-chain Analysis: From leveraging explorers to key indicators, we provide data on capital flow and market sentiment.
Step 6: The Professional (Futures/Options) — Understand the "leverage amplifies decline" structure and establish trading principles for survival.
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Step 7: The Macro Master (Macro/Cycle) — Read "Stablecoin Growth and Liquidity" in one frame.
Liquidity Framework: Understand the connection between global liquidity and crypto, and maintain a baseline of judgment even during periods of panic.
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🔎 Market Interpretation
- The USD1 stablecoin of the Trump-linked project (World Liberty Financial) was targeted by an "organized attack" (account hacking, short selling, and FUD proliferation), but the deviation from the peg (USD 1) was limited to a temporary level (around $0.994) and quickly recovered.
Standard Chartered maintained its forecast for the stablecoin market size (USD 2 trillion by 2028), but lowered its forecast for additional demand for US Treasury bonds (T-bills) due to reserve assets (previously from USD 1.6 trillion to USD 0.8-1 trillion).
Bitcoin plunged 4% in a short period (2 hours), giving back the weekend's gains. Long leverage liquidations were concentrated (92% of liquidations were long positions), strengthening the "fear phase" signal.
💡 Strategy Points
- Since the stablecoin peg departure event is a 'liquidity/trust test' in nature, it is crucial to confirm the recovery speed, redemption mechanism, and collateral transparency (1:1 backing basis).
- The higher the leverage ratio, the greater the chain liquidation in the event of a sharp decline. Therefore, reducing position leverage and managing loss cuts/liquidation prices are important in periods of increased volatility.
- Separately interpret macroeconomic variables (regulatory passage, e.g., the GENIUS Act) and short-term supply and demand (adjusted Treasury bond demand forecasts): 'Long-term growth (market 2T)' and 'short-term shocks (downward demand forecasts, sharp price drops)' can occur simultaneously.
📘 Glossary
- FUD: The act of stimulating selling sentiment by spreading fear, uncertainty, and doubt.
- Peg: A state in which a stablecoin maintains a target price (usually $1).
- Mint & Redeem: A structure in which stablecoins are issued (minted) or redeemed (redeemed) and exchanged for a reference asset (such as the dollar).
- Short selling: A strategy of borrowing an asset, selling it in anticipation of a price decline, and then buying it back at a lower price to repay the loan.
- Liquidation: The exchange forcibly closes a leveraged position due to insufficient margin.
💡 Frequently Asked Questions (FAQ)
Q.
What happened to World Liberty Financial (WLFI) and USD1?
World Liberty Financial revealed that it had been subjected to an "organized attack," including a hack of its co-founder's account, massive short selling of its WLFI tokens, and the spread of false information through influencers. As a result, the price of WLFI fell approximately 7%, briefly shaking the peg to USD1, reaching around $0.994, before recovering to above $0.999.
Q.
What was the key reason for the rapid recovery of the USD1 stablecoin?
According to the company, USD1 is designed with 1:1 full collateral and a mint/redemption (issuance/repurchase) mechanism, helping the price converge to the target price (USD 1) through redemption even when supply and demand shocks occur. However, investors are advised to separately verify specific details, such as collateral composition, audits/disclosures, and redemption terms.
Q.
Why did Bitcoin plummet despite the stablecoin outlook of $2 trillion?
Long-term prospects (stablecoin market expected to reach $2 trillion by 2028) and short-term price movements can be decoupled. This time, a short-term plunge accelerated the decline, triggering massive liquidations of leveraged long positions (92% of liquidations were long positions). Furthermore, growing fears quickly reversed the weekend's gains.
TP AI Precautions
This article was summarized using a TokenPost.ai-based language model. Key points in the text may be omitted or inaccurate.
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