{"id":522662,"date":"2023-03-11T11:06:15","date_gmt":"2023-03-11T11:06:15","guid":{"rendered":"https:\/\/wncen.com\/?p=522662"},"modified":"2024-06-11T14:34:12","modified_gmt":"2024-06-11T14:34:12","slug":"usdc-is-in-trouble-but-it-wont-go-to-zero-like-ust-did-heres-why","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/usdc-is-in-trouble-but-it-wont-go-to-zero-like-ust-did-heres-why\/","title":{"rendered":"USDC Is In Trouble, But It Won’t Go To Zero Like UST Did – Here’s Why"},"content":{"rendered":"

USDC, the stablecoin tracing the USD, is under immense pressure as users rush to convert to other assets, including BUSD by Paxos and USDT by Tether Holdings.<\/span><\/p>\n

USDC Has De-pegged<\/span><\/h2>\n
As USDC’s market cap rapidly shrinks, primarily because of mass exits, there has been a de-peg. The stablecoin is <\/span>trading<\/span><\/a> at $0.90 to the USD at the time of writing on March 11.\u00a0<\/span><\/p>\n
$\"USDC$
USDC Price On March 11| Source: Gemini On TradingView<\/a><\/figcaption><\/figure>\n
However, amidst this fear, USDC won’t likely crash to zero like UST, the algorithmic stablecoin by Terra, did.\u00a0<\/span><\/p>\n
Related Reading: Bitcoin Rally Fueled By USD Coin (USDC) Rotating Into BTC: Santiment<\/a><\/div>\n
The collapse of UST was attributed to its structure and backing by other digital assets, including Bitcoin and LUNA.\u00a0<\/span><\/p>\n
Since it depended on algorithms to track the value of the USD and always ensure parity, any pressure on any underlying coins, Bitcoin or LUNA, led to intense selling pressure, causing a de-peg.\u00a0<\/span><\/p>\n
The UST de-peg triggered a ripple effect that eventually saw the crypto market drop below $30k, causing massive liquidation and pain for affected holders.<\/span><\/p>\n
What’s on the table currently is USDC by Circle. Although USDC is at $0.90, further weighing negatively on cryptocurrency prices, it is improbable that the USDC will drop to $0.\u00a0<\/span><\/p>\n
As an illustration, the token has a circulating supply of $40.9 billion as of March 11. Each USDC token, it should be noted, is backed 1:1 with cash, and redemption means every backing cash or cash equivalent from Circle must be sold and disbursed to the client.<\/span><\/p>\n
Expecting Normalcy To Resume On Monday?<\/span><\/h2>\n
Circle has said it has enough reserves despite $3.3 billion out of the total $40 billion held at Silicon Valley Bank (SVB).\u00a0<\/span><\/p>\n
\n
1\/ Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB.<\/p>\n
— Circle (@circle) March 11, 2023<\/a><\/p><\/blockquote>\n