USDC Depegged? Close Call

Crypto Current


So Silicon Valley bank collapsed. So over the last week, a lot of things happen in secession. First, last week we were reported on silvergate starting to have some challenges. It ultimately collapsed when under. Shortly after you had this bank now go under, which was very unfortunate. Silicon Valley bank, which is host a lot of regular web two VCs. So of the amount of money that it had in its reserves, only about 3% are FDIC insured, which means that the $250,000 that the federal government ensures up to depositors, only 3% of those people were covered. So 97% had more than that amount in there, which was a huge news and kind of sent not only the traditional markets in a freefall, but also was a huge risk for USD C as it got depict because it came out that SVB is had a certain amount of USD C had a certain amount of their money in SVB. Roughly three $1 billion. So that caused USD C to the peg. And as soon as that started to happen, you saw the entire crypto market kind of going to freefall down. Over the last week. Now, as that happened over the weekend institutions like coinbase stopped all of USD C trading until Monday and what the FDIC happened, they came in and they restructured over the weekend and basically stopped the freefall that was happening about the traditional markets. And the crypto markets and got USD C in a stable place to where they no longer have that for $3 billion loss on books. They are now covered. And what you saw in response to that was an absolute short squeeze happened in the market.

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