Hi HODLers,
The dominoes are still moving and there might be other organisations that end up falling.
Once deemed the most reliable stablecoin: USDC is under the spotlight as U.S.-based stablecoin issuer Circle held a part of its USDC stablecoin’s cash reserves at Silicon Valley Bank.
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This can be seen in the firm's latest attestation (as of Jan. 17, 2023).
USDC is the 2nd argest stablecoin on the market, with a $43 billion circulating. It is backed by cash deposits and US-Bonds.
Full list of Banks where Circle held deposits
- Bank of New York Mellon, Citizens Trust Bank,
- Customers Bank,
- New York Community Bank (a division of Flagstar Bank, N.A.),
- Signature Bank,
- Silicon Valley Bank and
- Silvergate Bank
Circle also keeps some part of USDC reserves in a dedicated BlackRock fund.
The two last ones are now in the process of being liquidated. Signature Bank is also under strong pressures as it is a regional bank linked to tech and the Bay Area.
I have seen a lot of speculation around the amount of assets that Circle had in SVB (from $3bn to $7bn) but these are just speculations and probably FOMO. Nevertheless, a sizeable amount of their capital must be in these 2 now failed banks. This is worrysome for USDC possibility to be redeemed.
How things move fast in crypto... A few weeks ago, $USDT was the least trustworthy and now it seems they might be the safest.
USDC Price Chart
I am not going to lie, I have taken advantage of this situation to short USDC as the risk-reward is clearly positive. I added short positions up to $0.992 and I have been deleeraging around $0.987.
USDC might need a haircut for a while before this is figuring out and worst case scenario, it goes back to the PEG.
FUD or real concerns?
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