- Cryptocurrency market impacted by Silicon Valley Bank and Silvergate collapse
- DAI hits an all-time low of 0.88 cents, traders concerned about Circle exposure
- Future of stablecoins uncertain, investors watch market closely
The recent collapse of Silicon Valley Bank and Silvergate has had significant consequences for the cryptocurrency market.
Algorithmic stablecoin DAI has hit an all-time low of 0.88 cents as a result of this development and is currently trading at 0.90 cents, according to CoinGecko data. It is an algorithmic stablecoin that is collateralized by MakerDAO, which includes USDC.
Many traders believe that Circle, the issuer of USDC, may have worse exposure to Silicon Valley Bank than the $3.3 billion it previously disclosed.
On-chain data from Dune indicates $563 million of DAI has been burned in the last 24 hours, significantly impacting the market, despite having a market cap of $4.9 billion.
As traders flee USDC, Curve 3pool’s liquidity pool has also been hit. By Saturday afternoon Hong Kong Time, the pool’s share of USDT had dwindled to less than 1.5%, a worrying trend for traders.
The future of stablecoins remains uncertain in the wake of these developments, and many investors are concerned about the market’s stability. Tron’s USDD has also lost its peg and is trading at 93 cents, further exacerbating the situation. While Tether remains pegged at $1, providing some stability, the instability in the stablecoin market is a cause for concern for many investors.
The impact of the sudden collapse of Silicon Valley Bank and Silvergate on the cryptocurrency market, particularly on stablecoins, is something that will be watched closely by investors in the coming weeks.
The exposure of Circle to Silicon Valley Bank has caused a significant amount of speculation among traders, and the developments in the stablecoin market have sparked widespread concern about the stability of the sector. The market continues to grapple with the aftermath of these bank failures, and it remains uncertain what the future holds for stablecoins.
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