After a significant sell-off, the worldwide market for digital assets experienced a significant recovery on Saturday morning. The cost of Bitcoin and Ethereum increased by 3% and 5%, respectively. Yet, as the Silicon Valley Bank crisis continues to plague the cryptocurrency market, the major stablecoins USDC, DAI, and USDD experienced a significant depegging.
USDC To Plunge As Markets Collapse?
The second-largest stablecoin, USD Coin (USDC), had its dollar-pegged value fall by 11% over the previous day, according to the data. As of the time of publication, USDC is trading at an average price of $0.912. Once it loses its $1 fixed value, its 24-hour trading volume experienced a tremendous increase of 321% to stand at $18.54 billion.
In a statement, Circle, the USDC's issuer, named Silicon Valley Bank as one of its six banking partners. Yet, they only manage 25% of the USDC reserves stored in cash through these institutions. The Circle is presently awaiting information regarding how its users may be impacted by the Federal Deposit Insurance Corporation's (FDIC) receivership of SVB.
While USDC's market worth dropped to $36.4 billion, it still has a circulating supply of over 40.9 billion. Due to the market's present high liquidity, the gap between the dollar-pegged value and current standing value is widening.
Yet USDC is not the only stablecoin having issues with depegging in light of the current crisis. DAI, a stablecoin with an Ethereum foundation and dollar fixed value, also suffered. DAI's price fell 10% in the previous day. At the time of publication, it is selling for an average price of $0.904.
The USDD of Justin Sun, which has already had depreciation-related issues, has fallen by almost 5% during the past day. At the time of publication, the USDD is trading at an average price of $0.95.