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Shaurya is the Co-Leader of the CoinDesk tokens and data team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.
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USD Coin (USDC) fell under 90 cents on Saturday amid little respite for the token’s recovery as traders likely fled to other stablecoins to protect capital.
USDC traded at 87 cents in Asian morning hours, reaching lifetime lows. It has since rebounded to just over 90 cents as of Asian evening hours.
Some traders bet on a gradual recovery to the $1 mark, buying the relatively cheap USDC for a potential 10% gain should the tokens repeg to the intended dollar mark.
Leverage could potentially magnify returns for traders betting on a recovery. As such, futures funding rates on the crypto exchange Bybit jumped to as much as 0.3% on Saturday morning.
That means traders made as much as 0.3% in fees from their total market position. The funding was paid by traders who shorted USDC, paying over 0.4% to borrow the asset and bet on lower prices.
Some $4 million in USDC futures were liquidated in the past 24 hours, Coinglass data shows.
Elsewhere, Maker’s decentralized stablecoin dai (DAI) also depegged from its intended $1 mark on Saturday amid market stress, CoinDesk reported. It hit an all-time low of 88 cents.
Friday’s collapse of Silicon Valley Bank (SVB) caused a market-wide drop for cryptocurrencies in the past 24 hours as traders found some of the industry’s major players had exposure to the bank.
These players included U.S.-based stablecoin issuer Circle held a part of its USDC stablecoin’s cash reserves at Silicon Valley Bank as of Jan. 17, according to the firm’s latest attestation.
A Circle spokesperson said late Friday that SVB was one of the six banks that the firm used “for managing the approximately 25% portion of USDC reserves held in cash.”
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As the cryptocurrency market continues to remain volatile, traders have recently been betting on a rebound in the USD Coin (USDC). The digital asset has experienced a sharp decline over the past few weeks, with its value slipping to around 90 cents.
The USD Coin is a stablecoin that’s pegged to the US dollar. It was launched in 2018 by the CENTRE consortium, which is backed by Coinbase and Circle. The coin allows traders to quickly and securely exchange value without the use of government-backed money.
In recent weeks, the USDC has been a big focus for traders, with many speculating that the coin could see a rebound soon. This comes after the coin dropped to as low as 90 cents, far below its original price of $1. It’s likely that many traders are hoping to buy in low and ride the coin’s recovery back up to its original price.
At the same time, it’s important to note that the USD Coin isn’t the only digital asset experiencing a price slump. In fact, the majority of major digital assets have also been bearish over recent weeks. This means that any potential rebound in the USD Coin could be spurred on by an overall market rebound in the entire cryptocurrency sector.
Considering the current state of the market, it’s hard to pinpoint exactly when the cryptocurrency sector might start to turn bullish again. Nevertheless, traders are betting on an imminent rebound in the USD Coin, which comes as good news if you’re holding onto any USDC. Whether that happens or not remains to be seen, so it’s important to be aware of the potential risks involved when investing in cryptocurrencies.
