SNEAK PEEK
- The value of USD Coin (USDC) has dropped below the $1 threshold after news of $3.3 billion stored at Silicon Valley Bank.
- The panic among USDC users has caused a rush to withdraw or move to other stablecoins.
- Despite the ongoing turbulence, Bitcoin is trading positively with a price gain of 9.33%.
Bitcoin suddenly soared to the $50,000 mark on March 13, but the reason behind the flash action was not due to market demand or news of a major institutional investment, but because Circle’s USDC stablecoin was in danger of running out of liquidity, causing panic among users and triggering a rush to withdraw or move to other stablecoins.
According to data, the value of USD Coin (USDC) stablecoin has swiftly dropped below the $1 threshold. This comes after the stablecoin revealed that $3.3 billion was stored at the Silicon Valley Bank (SVB) after the banking institution’s collapse, which sent shockwaves across the crypto market, particularly stablecoins.
This sum that the firm is freezing is far greater than what the USDC users predicted. The present amount accounts for 8.25% of the total $40 billion in assets held as reserves by the USDC.
Due to this, the community has been sent into a frenzy as users rush to withdraw or flee to other stablecoins due to the concerning news regarding USDC’s stability. This has caused USDC-rich pools on DEFI platforms such as Curve to be depleted rapidly, further contributing to the chaos.
To add fuel to the fire, major exchanges like Binance have taken measures to ease the conversion pressure on their platforms. Binance has halted the USDC to BUSD conversion feature, while Coinbase has put a stop to swaps from USDC to USD. This unexpected turn of events has left many traders in a state of uncertainty, unsure of what the future holds for the stability of the USD.
#Binance will add the following trading pairs:
🔸 BNB/USDC
🔸 BTC/USDC
🔸 ETH/USDChttps://t.co/tSYDb0BTu6— Binance (@binance) March 12, 2023
Fortunately, as it is the weekend, US banks are currently open and working to address the situation. Despite the ongoing turbulence, the community remains hopeful that a solution will soon be found to restore stability to the market.
At the time of writing, Bitcoin was trading in a positive mood, with a price gain of 9.33%, and it was exchanging hands at $22,448.17, with support and resistance set at $20,475.60 and $22,728.52, respectively.
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- Source: https://investorbites.com/usdc-plunge-triggers-panic-as-btc-surges-to-50000-mark/
