Stablecoin USDC lost its peg to the dollar

Today, March 11, 2023, the news that stablecoin USD Coin (USDC) lost its peg to the US dollar, caused panic around the world. At the moment, the price for 1 USDC is $0.91, and this has caused interest, what will happen next with this stablecoin or with the whole cryptocurrency as a whole.

We will briefly tell you about this event in our article. We will also express our opinion about this news.

Stablecoin USDC lost its peg to the dollar

After the issuer USDC, Circle, has announced that it will hold its reserves at Silicon Valley Bank (SVB), which has recently been considered bankrupt due to a lack of liquidity. stablecoin changed its peg to the dollar. This caused a backlash in the crypto community, leading to a price drop.

The news also affected algorithmic stablecoins DAI and FRAX, which held part of their collateral in USDC and also lost their dollar pegs.

Silicon Valley Bank (SVB) shares plummeted 60%, causing the bank's shares to lose $80 billion in value. SVB is one of the largest banks in the US and provides banking services to crypto-currency venture capital funds such as Sequoia and Andreessen Horowitz (a16z).

Cryptus Exchange Binance temporarily suspended the automatic conversion of USDC to BUSD "due to current market conditions."

Our opinion

This is certainly a serious blow to the crypto industry and the stablecoin USDC, whose further fate, unfortunately, is unknown.

How much negativity was around Tether all these years and it is ironic to see USDC and DAI taking a hit.

We hope that our readers, if they kept stablecoins, then diversified cash in several similar coins.

It is quite logical to see red candles this and the coming days, maybe weeks, but, in general, for kriptovalyuty this is a small blow, after which everything will be restored. We believe that this negative was created specifically to kick all the hamsters out of the market and continue to grow. Unfortunately, some people earn and others lose. Such a reality.

Write in the comments what you think about this.

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