The past 24 hours saw the cryptocurrency market take a bit of a breather as it managed to recover around $16 billion in terms of its total capitalization.
That said, the turmoil around USDC continues, although the stablecoin recovered to about $0.95 as Circled issued a somewhat reassuring statement.
USDC Recovers to $0.95
USDC’s depeg has been the hottest topic in the cryptocurrency market throughout the past 48 hours. It’s the second-largest stablecoin by means of total capitalization and the fifth-largest cryptocurrency altogether.
As a stablecoin, USDC’s price should never fluctuate from $1, but yesterday, it crashed and burned below $0.90 for the first time. This happened Silicon Valley Bank – one of the largest financial institutions in the fintech world, was essentially shut down by regulators.
It turns out that Circle holds a whopping $3.3 billion of the cash reserves backing USDC at SVB, suggesting that until the bank’s issues are resolved (if), USDC is not backed 1-to-1 by the USD.
This sent the cryptocurrency lower, but Circle was able to release a statement, reassuring that even if the money at SVB is lost, they will cover any shortfall:
In such case, Circle, as required by law and under stored-value money transmission regulation, will stand behind USDC and cover any shortfall using corporate resources, involving external capital if necessary.
This appears to have calmed the sentiment as USDC recovered to around $0.95 at the time of this writing.
Bitcoin Reclaims $20K
The above has also had an impact on the broader cryptocurrency market. Bitcoin’s price has been able to reclaim the important technical and psychological level of $20,000 and is currently trading above it, as seen in the chart below:
BTC is up about 1.7% on the day. Ethereum is also up around 2.1% during the last 24 hours as it appears that worries about the NYAG claiming ETH is a security have started to dissipate.
MATIC also pushed above $1 and is up 4.2% on the day. Interestingly enough, the best performer from the top 10 cryptocurrencies by market cap is USDC – a stablecoin.
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