After 72 hours of chaos, the second largest stablecoin in the crypto industry, USDC, has finally returned to its original $1 price mark. Meanwhile, Bitcoin continues its impressive rally.
USDC to peg
On the evening of March 13, stablecoin USDC rallied back to the $1 value threshold, temporarily stabilizing after a period of unprecedented turmoil in history.
Earlier, after the US bank Silicon Valley Bank collapsed on the evening of Friday (March 10), USDC issuer Circle admitted to having up to $3.3 billion in cash backing for stablecoins stuck in the bank. This bank accounts for 8% of USDC’s collateral.
That news caused panic in the cryptocurrency market, causing USDC to sell off sharply on March 11 to $0.87. This is the most severe depeg in USDC history since its creation in 2018.
By March 12, Circle confirmed that it would use all measures to make up for the shortfall, including using company assets or even raising capital. USDC price recovered to $0.96 during that time.
In the early morning of March 13, the US government, because they did not want the bank run to spread, decided to intervene and pledged to compensate all depositors at Silicon Valley Bank, including Circle. The cryptocurrency market has since recovered strongly, bringing BTC to $ 22,600.
In the evening, when the US financial industry opened, although the stock prices of many banks were heavily dumped, USDC successfully processed large-scale withdrawals and recovered to the $1 mark.
The second batch of 220,000,001 USDC ($217,256,600) burned at USDC Treasury. https://t.co/eUaLcuDWJj
— Wu Blockchain (@WuBlockchain) March 13, 2023
However, Circle has yet to make an official announcement that it has recovered the other $3.3 billion from Silicon Valley Bank.
Bitcoin up 18% within 24 hours
Thanks to the momentum of the recovery stemming from rumors that the Fed will have to reconsider its rate adjustment by the end of this March, Bitcoin has grown strongly in the past 24 hours, jumping nearly 18% to $24,444 – the highest level. from 2/23/
On March 13 alone, BTC recovered nearly $4,000 in value.
In addition, the fact that US bank stocks are being sold off sharply and being stopped by the stock exchange makes running to alternative assets such as cryptocurrencies or gold an option that many investors consider.
Be your own bank.
Got #Bitcoin? pic.twitter.com/niE9Vz5iSs
— Will Clemente (@WClementeIII) March 13, 2023
This can’t be good pic.twitter.com/9bPY4qGmSo
— Eric Balchunas (@EricBalchunas) March 13, 2023
Ethereum also recorded a nearly 16% recovery to $1,692, while the rest of the major altcoins were all up between 3-12%.
The volume of derivative orders liquidated in the last 24 hours reached 307 million USD, with short orders accounting for 82%.