Is it the End for us?
Good Morning Saints,
Hope you’re having a wonderful weekend?
If you’re reading this, you’re always one of the chosen Saints and you’re special.
Now, let’s get to the topic of the day……..Grab a cup of coffee and let’s chill
Today I’ll not be doing a recap of my previous Threads or on L2s rather let’s dive on the current market Situation.
CVI still in low volatility and has taken a massive hit downwards from the upper 80 region
What has happened so far
I woke up yesterday morning only to see our precious $USDC trading at $0.96 .
The question stuck in everyone’s mind now is “How did it get this far?”
Welcome to crypto where FUD spreads faster than the actual reality and if that happens to be indeed true, There’s always Chaos and Contagion.
What a lot don’t understand here is that the fall of $USDC will have much impact on Crypto as a whole and we might never recover from this.
why??
This is not $UST, $USDC is not an algorithmic stablecoin like Luna’s $UST.
$USDC is a digital stablecoin pegged to the US Dollar and managed by a consortium called Centre, which was founded by Circle.
$USDC is one of crypto’s largest stablecoin and a lot of protocol’s treasury are in $USDC, A lot of Institutions, VCs e.t.c all have their funds in $USDC.
So, what exactly happened?
It all started when binance delisted three stablecoins ($USDC, $USDP and $TUSD) in September 2022 with deposits/withdrawals to be auto converted to $BUSD
why?
The reason was to concentrate stablecoin liquidity, The three stablecoins haven’t trade much on Binance so far.
In early september, there were $26B in stablecoin in which $20B was in $BUSD, $5B in $USDT and the rest on other stables.
In other reason, Binance may want to push their own stablecoin.
Although this isn’t what caused or affected the $USDC de-peg but it important to know every details that has been connected with $USDC.
Remember earlier when i told you who founded $USDC and it all comes down to Circle having its $USDC reserve in Silicon Valley Bank (SVB) up to about $40B.
Here’s a well detailed thread on SVB and its crash
So with this happening Circle was forced to make a tweet.
How did it get worse?
A lot of fudders started taking action and Panic selling while some Threadoors and Media hopped on the train as well to Trend which IMO doesn’t make sense.
It’s better if you simply don’t know what to say or do, Do nothing
If you’re having a bad day, remember someone swapped $2M for $0.05
while all these were happening, Coinbase also paused USDC:USD conversion as many were trying to flee from $USDC
That’s not all Frens, Here are some other events that happened so far which affected the crypto market entirely
Is it getting any better now?
Circle made an update regarding its $USDC in which only $3.3B was affected by the SVB crash.
So, what’s next?
Several Top Chads like Adam Cochran and Ignas made some important tweets and threads regarding this Scenario.
Here's huf's Insight on how this might play out after the whole recovery process and what $USDC worth might be
The issue aggravated due to low liquidity on CEX/DEXes and Binance had to relist USDC/USDT trading pair which was a good news as well.
Also, Vitalik exchanged 500 $ETH for $USDC and $DAI
Finally, Jeremy Allaire the co-founder of circle made an important update on the fate of $USDC and Silicon valley Bank (SVB).
His update aligns towards positivity regarding the whole case scenario and $USDC liquidity operations will resume normal on monday when banks open.
What stables are safe now to keep my assets
This all alarms towards the need for a fully decentralized stablecoin and IMO this won’t be easily achieved.
This was what Do kwon tried building but was a failed experiment, now we’ve seen some other decentralized stablecoin emerging like AAVE’s $GHO, $crvUSD $FRAX e.t.c
$LUSD has been the most Decentralized Stablecoin so far and Here’s a deep dive thread by DeFI Cheetah
Finally, Moments like this calls for self reflection regarding our Finances, Investments and decision.
Take some time, go through your portfolio, diversify your assets as this has thought us a lesson “Do not put all your eggs in one basket”.
There are many Top stable coins out there, you can diversify them in $USDT, $USDC, $BUSD, $DAI e.t.c
We wait for Monday to see what’s next, Until then, see you next time.
Thanks for reading and if you like it, do leave a feedback and forward to your Friends. There is love in Sharing and see you next time.
DeFI Saint
Founder, The Saints Creed