Nine out of top 10 stablecoins trading below peg as USDC contagion spreads – Tether sole survivor
According to CryptoSlate data, nine of the top 10 stablecoins by market cap are trading below the dollar peg.
USDC lost its peg after Circle announced it had about $3.3 billion in cash reserves held in the collapsed Silicon Valley Bank, as investors traumatized by multiple 2022 meltdowns pushed USDC began to be exchanged for other stablecoins and cryptocurrencies, causing an unprecedented redemption.
Stablecoins struggling with stability
At the time of writing, almost all major stablecoins are struggling to maintain their pegs, including Binance’s BUSD, which is trading at $0.9988.
The biggest loser is USDC, which has lost almost 10% of its value and is currently trading at $0.917. Circle is trying to allay fears of a full-blown bankruptcy, saying it remains resilient despite exposure to struggling banks. So far, we continue to honor 1:1 redemption.
Some traders and analysts speculate that stablecoins are trading under The actual value of the deposit, even if the chance of recovering the deposit is 0%. However, the majority sentiment indicates that the matter will be quickly resolved within a few weeks based on past cases covered by the FDIC. Nature of Circle’s deposits – resulting from the sale panic and trauma.
DAI was the second most affected stablecoin, currently trading at $0.936. Based on on-chain data, roughly $563 million worth of DAI was burned as the stablecoin crash swept the market.
GUSD fell to $0.96 at one point, but has recovered to $0.988 at the time of writing. But it still needs the pegs back.
immobile tether
Tether’s USDT seems unaffected by the current market conditions and is currently trading above the $1.01 peg.
The stablecoin has benefited from the overall decline, and its dominance is increasing by the minute as investors continue to trade other coins into USDT.
Most funds also support USDT and exchange some of their USDC reserves for USDT. For example, on-chain data shows Hashed, Spartan Group, and Signum Capital followed depeg in exchanging millions of USDC for USDT.
Meanwhile, Jump Trading, Wintermute Trading, Genesis Trading and Blocktower Capital have exchanged millions of dollars of USDC for cash through Circle and Coinbase.
