Later, the value returned to normal levels at $22 000

​Bitcoin rate paired with the USDC reaches $50 000

13.03.2023 - 10:00

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3 min

What’s new? On March 13, the bitcoin rate in a trading pair with USD Coin (USDC) stablecoin on the Binance crypto exchange temporarily jumped to $50 000. Analyst Colin Wu suggested on Twitter that the subsequent return of the asset’s price to the normal $22 200 level was caused by a lack of liquidity. In the discussion, another user added that the fluctuation of quotations in the BTC/USDC pair was the result of weak liquidity due to the panic around the stablecoin. For instance, Circle, the issuer of USDC, previously reported that it had been holding about $3,3 billion in reserves at the bankrupt Silicon Valley Bank (SVB).

SVB and USDC. Following Circle’s announcement that it was holding reserves at SVB, the stablecoin lost parity with the US dollar. Investors began swapping USDC for other stablecoins to cut their losses. One such transaction resulted in a user exchanging over 2 million USDC for 0,05 USDT by mistake.

In addition, on March 11, Binance temporarily suspended the automatic conversion of USDC to Binance USD (BUSD) stablecoins, in particular, due to high inflows of funds and increased load on the platform.

On March 12, the US regulators developed a plan to recover funds from SVB depositors, which did not include a bailout of the bank itself.

On March 13, Circle CEO Jeremy Allaire said that 100% of USDC reserves are secure and the company will complete the transfer of the remaining SVB funds to BNY Mellon Bank.

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