A digital currency is witnessing a collapse of $ 10 billion in its market value.. What is happening?
The USDC stablecoin has seen its market cap collapse by $10 billion
Circle’s USDC continues to see mass redemptions as the stablecoin’s market cap drops to around $32.5 billion; Down nearly $10 billion over the past two weeks.
The events of early March seem to have damaged investors and traders’ confidence in the stablecoin’s reliability; Although Circle offers full refunds without delay for USDC.
Net recoveries in the past 24 hours amounted to approximately $ 463 million ; With $487 million burned and only $24.1 million minted. USDC’s market capitalization increased from about $33.3 billion to $32.8 billion over the same period.
The problems with the stablecoin began in early March when news emerged that Circle had $3.3 billion in funds in reserve at a Silicon Valley bank; This resulted in the USDC being de-pegged from the US dollar. After US federal bank regulators ensured a full return of customer deposits from Silicon Valley Bank and Signature Bank ; Circle CEO Jeremy Allaire announced that operations will resume. However, recoveries continued.
Last week Allaire addressed concerns in a Twitter post ; He linked the sale to a broader process of de-risking among investors projects exposed to US banking and US regulatory risks. For Circle, Allaire said, “We will continue to do what we have always done” ; Stating that the stablecoin “never fails to mint or redeem USDC for $1 ; Including during a stress test in the past weeks.”
“USDC as a protocol and digital currency continues to operate on public chains, protocols and wallets without interruption,” Allaire said.