USDC Is In Trouble, But It Won’t Go To Zero Like UST Did

Name	Symbol	Market	Market Cap ($)	Algorithm
USD Coin	USDCUSD	Crypto	28,072,045,240	Not Mineable

Name

Symbol

Market

Market Cap ($)

Algorithm

USD Coin

USDCUSD

Crypto

28,072,045,240

Not Mineable

	Price Change	Price Change %	Current Price	Bid Price	Offer
	0.00	0.00%	1.00	0.9999	1.00

Price Change

Price Change %

Current Price

Bid Price

Offer

0.00

0.00%

1.00

0.9999

1.00

High Price	Low Price	Open Price	Prev. Close	52 Week Range
1.00	0.9999	1.00	1.00	0.900010 - 1.29

High Price

Low Price

Open Price

Prev. Close

52 Week Range

1.00

0.9999

1.00

0.900010 - 1.29

Exchange	Last Trade	Size	Trade Price	Currency
KRKN	13:54:39	10.00	1.00	USD

Exchange

Last Trade

Size

Trade Price

Currency

KRKN

13:54:39

10.00

1.00

USD

Price x Volume	Volume	Base Symbol	Related Pairs
1,051,960.90	1,051,929.03	USDC	USDCEUR	USDCGBP	USDCBTC

Price x Volume

Volume

Base Symbol

Related Pairs

1,051,960.90

1,051,929.03

USDC Is In Trouble, But It Won’t Go To Zero Like UST Did – Here’s Why

11/03/2023 11:06am

NEWSBTC

USDC, the stablecoin tracing the USD, is under immense pressure as users rush to convert to other assets, including BUSD by Paxos and USDT by Tether Holdings. USDC Has De-pegged As USDC’s market cap rapidly shrinks, primarily because of mass exits, there has been a de-peg. The stablecoin is trading at $0.90 to the USD at the time of writing on March 11. However, amidst this fear, USDC won’t likely crash to zero like UST, the algorithmic stablecoin by Terra, did. Related Reading: Bitcoin Rally Fueled By USD Coin (USDC) Rotating Into BTC: Santiment The collapse of UST was attributed to its structure and backing by other digital assets, including Bitcoin and LUNA. Since it depended on algorithms to track the value of the USD and always ensure parity, any pressure on any underlying coins, Bitcoin or LUNA, led to intense selling pressure, causing a de-peg. The UST de-peg triggered a ripple effect that eventually saw the crypto market drop below $30k, causing massive liquidation and pain for affected holders. What’s on the table currently is USDC by Circle. Although USDC is at $0.90, further weighing negatively on cryptocurrency prices, it is improbable that the USDC will drop to $0. As an illustration, the token has a circulating supply of $40.9 billion as of March 11. Each USDC token, it should be noted, is backed 1:1 with cash, and redemption means every backing cash or cash equivalent from Circle must be sold and disbursed to the client. Expecting Normalcy To Resume On Monday? Circle has said it has enough reserves despite $3.3 billion out of the total $40 billion held at Silicon Valley Bank (SVB). 1/ Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB. — Circle (@circle) March 11, 2023 Because SVB was FDIC insured, there will be a 94% payout, meaning even if there is a loss of approximately $198 million, it won’t be a big dent for Circle to warrant fears and conversions to other stablecoins. The loss will likely be covered by interest payments from treasuries, where most of Circle’s assets are held in. Several other factors worsen the current stablecoin’s preview, even contributing to the de-peg. The decision by Coinbase to pause USDC to fiat conversions over the weekend until Monday is stoking fear. Related Reading: Binance To Raise USDT, USDC, and TUSD Transaction Fees On Tron By 160% We are temporarily pausing USDC: USD conversions over the weekend while banks are closed. During periods of heightened activity, conversions rely on USD transfers from the banks that clear during normal banking hours. When banks open on Monday, we plan to re-commence conversions. From next week Monday, the peg will likely be restored as arbitrageurs flow back in. Feature Image From Canva, Chart From TradingView

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