The Silicon Valley Bank (SVB) and Silvergate collapse, most recently the de-peg of stablecoin USDC, has negatively impacted the cryptocurrency space. According to the data, crypto whales, the big investors in the space, were negatively affected by these developments. Here are the details…
Cryptocurrency whales took a big hit
In response to the phenomenal depegging of USD Coin (USDC) stablecoin caused by the collapse of its counterpart Silicon Valley Bank (SVB), crypto whales have reported serious losses and appear to be attempting to “fly” their capital to protect assets. Du Jun, co-founder of cryptocurrency exchange Huobi Global shared:
[Ben] I escaped LUNA, I escaped 3AC, even FTX [ve çöküşlerinden] I escaped but not Silvergate, SVB and USDC. I asked a few crypto experts: There were more than $1 billion in losses in stocks and deposits, including mine. I’m so sorry and it’s time to cut my budget.
On the same day, it was reported that Tron founder Justin Sun pulled 82 million USDC from decentralized finance (DeFi) protocol Aave v2 over a series of transactions and exchanged it for Dai (DAI). It is currently worth 82 million USDC, $75.26 million. Speaking of DAI, MakerDAO, behind the DAI stablecoin, released a contingency protocol on March 11 that puts restrictions on DAI minting using USDC to prevent panic selling. MakerDAO is one of the stablecoin’s largest holders, with over 3.1 billion USDC of reserves securing DAI. Following this development, crypto projects that included DAI in their tokens also suffered losses due to a chain reaction.
Daily trading volume on Curve skyrocketed
Curve Finance, a popular DeFi protocol for stablecoin trading, announced that they recorded the highest daily trading volume of all time due to the events. He reported that the transaction volume was $5.67 billion. For comparison, the protocol only has a locked total of $3.77 billion. That is, the daily trading volume has exceeded the value of the locked assets on the platform. Few other platforms could not handle the large volume of USDC related trading requests.
Apart from these, one more event stood out.. cryptocoin.com As we reported, a user made a trade that resulted in a permanent loss: he only received 0.05 Tether (USDT) after paying over 2.08 million USDC. KyberSwap, the decentralized exchange where the transaction took place, said it “helped the trader get their funds back” and was in touch with the user.
Will USDC and Circle “make it”?
According to Loki Zeng, a DeFi analyst at New Huo Technology, Circle’s reserves are split between $32.4 billion in treasury instruments, $3.3 billion in deposits at SVB and $7.8 billion in other financial institutions. According to Zeng, for the USDC to go bankrupt, it must meet three conditions. “There are plentiful deposits at SVB and three other banks at risk, the recovery rate of such deposits remains low and USDC is unable to mitigate such losses,” the analyst says.
Zeng believes it’s “unlikely to be a problem,” adding that his personal view is that even if there were a problem, it wouldn’t be as severe as FTX. The price of USDC is “located at $0.885 in the extreme case and $0.985 in the normal case. At the time of writing, USDC is at $0.958. On the other hand, Alex Svanevik, CEO of Blockchain analytics firm Nansen, also commented that Circle and USDC can “make it”. However, Svanevik also warned that Circle will require “first-class practice over the next few days.” In another tweet, Svanevik also revealed that a user moved 25 million USDC from their PulseX wallet and exchanged it for DAI.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram And YouTube join our channel!
Risk Disclosure: The articles and articles on Kriptokoin.com do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies. You can lose some or all of your money by investing in Bitcoin and cryptocurrencies. Remember that your transfers and transactions are at your own risk and any losses that may occur are your responsibility. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, assets or services in this article.
Disclaimer: Advertisements on Kriptokoin.com are carried out through third-party advertising channels. In addition, Kriptokoin.com also includes sponsored articles and press releases on its site. For this reason, advertising links directed from Kriptokoin.com are on the site completely independent of Kriptokoin.com’s approval, and visits and pop-ups directed by advertising links are the responsibility of the user. The advertisements on Kriptokoin.com and the pages directed by the links in the sponsored articles do not bind Kriptokoin.com in any way.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.