The USDC is a stablecoin , that is, a cryptocurrency with a stable value at any time of the day.
However, this weekend it stopped being worth a dollar and fell to 87 cents, causing panic in the industry.
One of the largest cryptocurrencies on the market is in trouble. The stablecoin called USDC took a big hit this weekend after falling from a dollar to 87 cents, causing panic among its investors.
This Saturday, the value of the USDC was affected by the crisis that a large bank in the technology sector is going through: Silicon Valley Bank . What happened?
A new crisis?
A stablecoin is a cryptocurrency that, under physical or algorithmic reserves, keeps its value tied to that of a fiat currency. In this case, the USDC had its parity with the US dollar, so this value should not fall at any time.
However, its management company, Circle, accepted this weekend that 3.3 billion dollars of its 10 billion cash reserves were in Silicon Valley Bank , a bank that has fallen under the control of the US authorities due to “ insolvency” of funds .
On Saturday, March 11, the USDC fell to a high of 87 cents. According to data from CoinGecko , the previous all-time low was about $0.97 in 2018. More recently, the coin fell to $0.99 following the Three Arrows Capital collapse.
As of this writing, the USDC is sitting at 95 cents.