Crypto Investors are getting afraid as they face a crisis in the market. Meanwhile, the market observation shows the depreciation in Circle’s stablecoin – USDC in the past few weeks.
While the overall crypto market capitalization remains above $1.18 trillion due to positive conditions, on the other hand, Circle’s USD Coin (USDC) saw loss of more than $10 billion in three weeks in Market cap.
According to CoinMarketCap, on March 6, USDC had a market cap of $44 billion, but due to the collapse of a crypto-friendly bank in the United States, it fell below $33 billion today, showing a loss of over $10 billion.
Circle’s USD Coin (USDC) witnesses constant withdrawals nowadays. Meanwhile, total withdrawals on the previous day came to slightly about $463 million, including $487 million destroyed and only $24.1 million minted.
This whole phenomenon started in early March when US regulators shut down one of the biggest crypto friendly banks, Silver Valley Bank (SVB). On March 11, news circulated that $3.3 billion of Circle’s funds were held at the collapsed SVB Bank, as a result of which its stablecoin USDC experienced de-pegging from the US dollar.
On March 11, the USD Coin (USDC) fell from its fixed value of $1 to an all-time low of $0.90. However, later, Circle’s co-founder and CEO-Jeremy Allaire assured that the $3.3 billion fund had been returned to SVB Bank after the full claim was guaranteed by US regulators.
Clients became aware of some of the concerns surrounding USDC following a tweet from Jeremy Allaire last week. He said, “ There seems to be a large-scale risk-off from USD that is exposed to US banks and US regulatory risk.”
While addressing Circle, Jeremy stated “we are going to keep doing what we have always done, operate within a regulatory perimeter.” In addition he said, “ we have never failed to mint or redeem USDC for $1, including during the past weeks stress test.”
