USDC Stablecoin Falls to 87 Cents After Circle Discloses Exposure to Silicon Valley Bank. USDC Volatility Lifts Bitcoin’s Coinbase Premium to 3-Year High
Circle says $3.3 billion of the cash reserves backing USDC remain at shuttered Silicon Valley Bank. USDC, DAI, and USDD have all depegged from $1.
US Dollar Coin, the No. 2 stablecoin by market cap, designed to remain always priced at $1, is currently trading at 91 cents, according to data on both CoinMarketCap and CoinGecko.
It fell as low as 87 cents overnight, below its prior all-time-low of 89 cents in May 2019. On Saturday morning, it had begun to recover.
The depegging happened after Circle, the issuer of USDC, disclosed on Friday night that some $3.3 billion worth of the cash reserves that back USDC remain held at Silicon Valley Bank, which was shut down by California financial regulators this week after a bank run.
Even before that disclosure, major crypto exchanges Binance and Coinbase took action, announcing they would temporarily suspend USDC conversions amid the panic.
That means customers with USDC held on those exchanges cannot get it out or convert it to something else, and are nervously waiting to hear more from Circle or see USDC regain its peg.
CoinDesk 14:32 EST — USDC Volatility Lifts Bitcoin’s Coinbase Premium to 3-Year High
The crisis at Silicon Valley Bank and the resulting volatility in the world’s second-largest dollar-pegged stablecoin, USD Coin (USDC), has bitcoin (BTC) trading at relatively higher prices on crypto exchange Coinbase.
Data tracked by analytics firm CryptoQuant shows bitcoin’s Coinbase Premium Index – which measures the spread between BTC’s U.S. dollar-denominated price (BTC/USD) on U.S.-based Coinbase and BTC’s tether-denominated price (BTC/USDT) on offshore giant Binance – rose to 0.8, the highest since March 2020.
Bitcoin trading at a premium on Coinbase is often taken to represent stronger buying pressure from stateside institutions and sophisticated traders.
Source: Decrypt
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