that it has $3.3 billion of USDC's reserves with the failed Silicon Valley Bank, investors scrambled to exit their USDC holdings. They swapped them into alternative stablecoins like Tether’s USDT or chose to exit the crypto market entirely into fiat, causing USDC's biggest depeg since its inception in 2018 and its market cap to fall below $40 billion — down more thanDemand for USDT caused it to move in the opposite direction on some exchanges,Currently, USDC is at $0.90, DAI at $0.92.
The $3.3 billion held at Silicon Valley Bank, which has become the largest bank to fail since 2008, is part of Circle's $40 billion reserves, amounting to some 8.25% — roughly the size of the depeg.its conversion feature between U.S. dollars and USDC until after the weekend. This was due to heightened activity. Binance has also suspended auto-conversion of USDC into BUSD due to high inflows.
A lot of USDC has been burned. Nansen noted that $2.34 billion had been burned in the last 24 hours, while $366 million was minted during that time. This suggests that big traders are redeeming their stablecoins for dollars with Circle. If USDC were to fall much further, the repercussions across the crypto market could intensify. According to DeFiLlama, if it fell below $0.865, for example, $50 million in USDC collateral would be liquidated on DeFi lending platforms like Aave and Compound .
It wasn’t just centralized exchanges where the impact was felt, either, with Ethereum transaction fees jumping aroundAddresses labeled by Etherscan as belonging to high-profile crypto personalities like Tron founder Justin Sun were alsoWhile DAI is a decentralized stablecoin, it's collateralized by other stablecoins — the biggest among them USDC.
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1 USD = 1 USD