In response to the rapid drop and rebound of the HT token, Huobi has created a $100 million liquidity fund to protect against future precipitous drops. The fund was established following a transfer of $ 100 million in USDC to Huobi by Justin Sun, which was confirmed just after 04:25 UTC or 11:27 AM Hong Kong time.
We have transferred 100 million #USDC to @HuobiGlobal. Done. https://t.co/0TbCsH2ixn https://t.co/XWeHI3FriZ
— H.E. Justin Sun 孙宇晨 (@justinsuntron) March 10, 2023
The recent HT token drop and rebound was caused by “leveraged liquidation on the market caused by a few users,” according to a tweet by Sun. This drop occurred amid a broader crypto market correction where $307 million in positions across the market were liquidated as traders digest the impact of Silvergate’s exit from banking crypto companies.
To prevent similar occurrences in the future, Sun tweeted that they will “continue to improve the liquidity depth of main cryptocurrencies and HT token, strengthen leverage risk warnings, and liquidity capabilities.”
Sun, a major holder of HT, had previously promised “many big moves around HT, including brand upgrade, heavy empowerment, and business cooperation,” which contributed to HT’s rally of nearly 75% in October.
Data from TradingView shows that HT dropped from a 24-hour-high of $4.81 to a low of $0.31 at 21:00 UTC on Huobi’s exchange. However, as of writing, HT is currently trading at $3.90 according to CoinGecko.
Earlier reports had flagged Sun’s transfer of $60 million in USDT to Aave, which is unrelated to the Huobi liquidity fund.
Moving forward, the establishment of the Huobi liquidity fund will help safeguard against future drops of the HT token and improve overall liquidity depth for major cryptocurrencies.
