Decoding the latest USDC update- Are USDT and DAI safer bets
Over the last few days, there has been a lot of FUD surrounding Circle after the firm was impacted by the bank run on Silicon Valley Bank (SVB).
On 12 March, Jeremy Allaire, CEO and co-founder of Circle, tweeted Circle’s statement on this matter.
According to Circle’s statement, its stablecoin USDC was 100% collateralized. Based on the data provided by Circle, 77% of USDC was collateralized through U.S. Treasury Bills, which amounted to $32.4B. The rest of its funds, which totaled $9.7 billion, were held at various institutions, one of which was SVB.
It was found that out of the remaining $9.7 billion, $5.4 billion of the funds were moved to BNY Mellon, in an effort to reduce bank risk.
At press time, SVB held a total of $3.3 billion of Circle’s funds.
Despite all the efforts made by the Circle team to give clarity on the matter, the FUD continued to haunt the stablecoin.
Source: glassnode
One indicator of the declining interest and rise in FUD was the decreasing liquidity of USDC on Uniswap. At press time, the liquidity of USDC on the DEX reached a 2-year low of $85,190,702.41.
As the skepticism against USDC began to rise, the interest in other alternative stablecoins such as USDT and DAI, went uphill.
According to Santiment’s data, the overall market cap for DAI and USDT surged by 6.8% and 1.2%, respectively. However, USDC continued to lose its footing as its market cap fell by 8.1% during the same period.
Source: Santiment
One of the reasons for the sharp decline in USDC’s market cap was the behavior of various large-scale funds and investors.
Lookonchain’s data indicated that major investment firms such as Jump Trading, Wintermute Trading, and BlockTower Capital exchanged large amounts of USDC for USD through Circle and
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