siliconevalleybank collapse caused $USDC to depeg from $1 over the weekend, hitting a low of $0.88. 👀 Here's a general explanation of what happened with CMC 👇 CMC will provide more updates as the story develops, so check back for more.
Is this as bad as UST? Will USDC go back to $1? And what does Silicon Valley Bank have to do with it?In the early Saturday morning hours, the Silicon Valley Bank failure caused USDC to de-peg from $1. The price dipped to almost $0.88 before recovering to around $0.96 at the time of writing. The reason for the de-peg is that Circle, the company issuing USDC, has $3.3 billion in reserves tied up at SVB.
The state-chartered commercial bank has a lot of crypto entities as clients, making its failure particularly relevant for the crypto industry. The Federal Deposit Insurance Corporation has taken receivership of the bank. According to an FDIC press release, all insured depositors will have access to their insured deposits no later than Monday morning.Not great by any means. But there is good reason to believe it is nowhere near as bad as UST, meaning USDC is not going to zero.
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