The collapse of Silicon Valley Bank turns out to be the largest bank to fall since the start of the financial crisis in 2008. But this turmoil has also benefited the bitcoin sector. The collapse of the bank was revealed to have $3.3 billion by American digital asset company Circle, which caused a huge tsunami in the market.
Has USDC Got Vitalik's Back?
A significant depegging event was recorded by Dollar Circle (USDC), a stablecoin backed by the dollar, after its issuer revealed assets were held in the SVB. In the previous day, the price of USDC fell by more than 10%. USDC fell from its $1 fixed value and eventually traded at $0.90.
Vitalik Buterin, a co-founder of Ethereum, appears to be in favor of the depegged stablecoin during this difficult moment. According to the information, Vitalik's labeled wallet address changed a number of digital tokens into USDC.
500 Ethereum were put into the Reflexer by Vitalik's designated address, according to PeckShieldAlert. Then, in the midst of the escalating crisis, he proceeded to coin 150K Rai Reflex Index (RAI). Yet the address exchanged 378.5K USDC for 132.5K RAI. The remaining 17.5K RAI were exchanged for 50K DAI, a depegged stablecoin, within a short period of time.
Vitalik previously said that he had high hopes for the RAI approach. An algorithmic stablecoin called Reflexer (RAI) is not pegged and only uses Ethereum as collateral.
In the past 24 hours, the Rai Reflex Index has decreased by 4%. At the time of publication, RAI was trading for an average price of $2.67. Its 24-hour trade volume has increased by 187% to $1.7 million, nevertheless.
Yet, the institutions that hold USDC are actively selling their holdings. IOSG Ventures' affiliated institution sold 118.73 million USDC for 105.67 million USDT, according to Look On Chain statistics. 2,756 Ethereum were also included, with a value of about $4 million.