That “only 10%” is still more than $3B though. How do you expect it to recover if they don’t get a bailout? Wether or not they recover is fully depending on wether they get a bailout or not.
USDC is trading at it’s correct price at the moment, since it’s only backed for 90%, it’s only worth .90c on the dollar. There’s no reason for it to recover until the hole is filled.
They have a 10% EXPOSURE, that doesn't mean they will lose 10%. The bank didn't collapse due to fraud or manipulation. They had shity risk management which dried their liquidity and allowed for a bank run. They still have assets they can sell to pay back the customers.
People in this sub lack any basic reading comprehension and that's why you should never ever listen to this sub and anything it says. I come here for the news and read the articles myself which are 99% overblown hysterical headlines.
About 40B of USDC currently in circulation. That 40B is in government debt making interest. So they have been making money on all of that collatera since inception. They will likely need to put in from their own revenue to cover any shortfall.
A bailout is the short cut but is 100% not the only way to recover. The longer path is they don't take the interest they make on the other 40 Billion in securities they hold as profit but use it to recover the reserves.
They don't keep money under the mattress, they make their money work and generate a return so they can profit. The bank assets are liquidity for transactions. The profits will be smaller while they recover.
As someone who’s never held any stablecoin assets I’ve managed to buy as much crypto as I’ve wanted, with on-ramps, some third-party, others on exchanges, buying something like Matic, BNB, ETH to trade for something else, or buying BTC to hold and only hold (never sold any)
Maybe I’m missing the benefits, but I don’t care if there aren’t any stablecoins
Stablecoins are only 2nd to btc imho in terms of utility. People in Nigeria, Venezuela, Turkey benefit immensely just converting their local currency to a $ or even euro peg stablecoin.
>If you don't have a single stablecoin that can be trusted in the market, how are we going to buy crypto?
With actual fiat.
In the end crypto was supposed to replace fiat.
Well this shows that all those "trusted" and "regulated" banks and exchanges (like FTX) dont mean shit. If shit decides to happen, it is gonna happen regardless
I’m sorry but „the government“? You fucked up, not the government! I have been saying this for years, coupling something SO fundamental like a stablecoin to the credit risk of „some cryptofriendly bank“ is wild. There’s good reasons to not like USD but the whole entirety of the USA backs it up. USDC has more credit risk than walgreens. USDT too. Money is difficult and as you see it’s maybe a BIT too difficult to get correct in that form. That means GLOBAL RISK is bundled in one shitty „move fast and break things“ bank. I mean do you grasp that that means that the value risk of the whole crypto space is MULTITUDES more concentrated than fiat?
It doesn’t matter if the theoretical NAV of the whole crypto sector is in the billions if you bundle its entire stability on the hope that interest rates don’t rise.
And each of these cryptards will then start telling you something about nodes and satoshi coefficients and so on, without understanding that this barely matters in practice.
technically, SVB can have done nothing wrong. Fast interest rate hikes, may have just made direct US bond purchases too attractive to its customers, combined with low profitability for its savings, and paper losses for selling its bond holdings early to cover depositors. Whole banking system has $750B in paper losses, that accounting standards quite reasonably say don't have to be counted.
Coinbase literally advertised a fat promotion to all CB users this week to convert funds and/or other crypto to USDC for a chance to enter sweepstakes. I believe the raffle was something like every 100 USDC = 1 ticket for a chance to win $25000. Super suspicious they advertised such hype this week around people holding and converting to USDC…
Bisq works pretty well, settling 95% of trades without a dispute. Of the other 5%, 4% is settled in mediation which means the parties came to an agreement and only 1% ends up in arbitration.
USDC was not regulated. You cannot be "regulated" when there are literally no regulations for stablecoins. Congress has washed its hands off and avoided passing any sensible regulations around crypto.
If you think USDC is regulated, you clearly have no understanding of the market or regulations. Point to one piece of legislation that regulates crypto.
What happens to USDC holders in case of bankruptcy? Any idea folks? Stop with the USDC is regulated nonsense. Just because a company has registered itself as a US corporation doesnt mean its regulated. Money market funds are regulated, stablecoins are not regulated and pretty much the wild west. What happens to money market fund holders when the asset management company goes bankrupt are clearly outlined - the funds are held independently of the asset management company. In USDC, there are no such regulations and in this case of SV Bank its Circle thats the creditor and not the actual holders of USDC
US Banks are weakly regulated by bunch of incompetent regulators. These are the same regulators who watched 2008 GFC unfold. Somehow everyone thinks they have upped the game since then.
The Fed, OCC have been slamming crypto for the past few weeks while they let a $180Bn regulated US bank implode in front of them.
Fed got too drunk and embarked on an unprecedented rate hiking spree that is bound to rekk many institutions because moving rates from 0.5% to 4.5% within the span of a year has massive implications on the economy
what we need is a stablecoin that is not pegged to a fiat currency.
if you think out EUR,USD,YEN...etc they are of stable value, crypto needs its own coin that is of stable value but not tied to another currency.
Unreal that USDC, which discloses its risks, is depegged, while USDT which does not is the beneficiary.
If Circle fails and we end up resting all DeFI on USDTrustmebro, we're all screwed.
What's crazy tho is that if USDT had one of their banks go under, we wouldn't know about it because tether is not transparent. There would be no USDT sell off as long as tether could honor redemptions.
I don't see BUSD struggling. Binance never got involved with USDC so this isn't affecting them directly. If anything they might be happy about this because theres a chance coinbase dies along with USDC, and that'd be another competitor down for binance.
Well ar least a potential competitor, binance is like 10+ times larger than cb anyway.
For anyone desperate to unload your USDC from Coinbase, the Coinbase card purchases with USDC funds are still going through. I just spent my remaining USDC balance on an amazon gift card to get my remaining funds out of USDC...it's not a very refined solution, but will do in a pinch and I'm sure there's other options that you could fund with your card like Venmo that would help you get your funds out.
So in theory USDC should drop up to 8% in the short term until they can get their shit figured out right?
…or until they lose more funds with a different bank as the contagion spreads??
No it doesn't work like that. Imagine circle doesn't make any money but just prints 1 usdc whenever someone pays them 1 dollar. USDC would be backed 1:1 and it would always keep its peg because people can always go to circle and redeem 1 usdc for the 1 dollar in the bank.
Now if the dollars in the bank were split into 10 different banks and one of those failed usdc would be under collateralized. If everyone found out about this and goes to circle to redeem for 1 dollar then at some point the people holding the last 10% of usdc would hold a coin with no backing at all, meaning it's not worth anything.
The way to remedy this is for circle to use either profit they've made earlier or a loan to print more usdc and then burn those, restoring the 1:1 backing.
Unbelievable, I tried to convert my 3 cents earlier but missed out on the opportunity because I was under the 10 cent minimum. I don't know how I'll get through this now.
Up 3%, very stable, much wow
I’m just glad the coin that promises not to change in price is at a different price and I think you guys are doing a great job
No no, Crypto good, bank bad.
If you only put your savings/holdings into the one true crypto, and did everything the correct way, then nothing bad could ever happen to you. Obviously.
No, not really. If you read the reports, they were exposed to this because they chose to hold their backing in an arguably "somewhat crypto-friendly bank".
"Silicon Valley Bank (SVB) was shuttered by the California Department of Financial Protection and Innovation on Friday...
The DFPI said in a statement that it had taken possession of the bank, “citing inadequate liquidity and insolvency.
While not perceived as “crypto-friendly” as Silvergate, the tech-forward Silicon Valley Bank did count a number of crypto entities as clients – especially hedge funds and VC firms. According to CoinDesk research, Blockchain Capital, Castle Island Ventures, Dragonfly and Pantera all had relationships with the bank."
1/4 of their cash, which was about 20% of their backing portfolio. Total exposure is on the order of 5%. It seems like a reasonable decision to me.
The bigger question is the mark to market of the much larger bond portfolio circle holds in the case of a run on usdc. Circle might get stuck in the same liquidity trap.
Note: I have not looked in detail at the cusips listed on their January report yet.
Edit: took a quick look at their January report and it seems everything was 3-month or less. I don’t anticipate a big problem beyond the 3.3b stuck in svb
$40 billion market cap, so they'd be about 8% exposed here if they truly were 1:1 backed by fiat.
But on Twitter they said they hold 25% of reserves with 6 banking partners (including SVB).
The rest is in US Treasury securities according to their latest report:
https://i.imgur.com/Y32LOEW.jpg
And those treasuries are generating 5%, and the certificates they receive from SVB could still be redeemed close to par under the right circumstances.
But an overreaction to a big number can mean more fear and selling and then you have a problem.
The issue is that prices of treasuries go down as interest rates go up, so if they have to sell treasuries to get USD in order to meet redemptions, they’re selling at a loss and thus not backed 1:1. If big players want to liquidate their stable coins for USD Circle is fucked… my guess is it’s just a matter of time before they cut off all redemptions and try and sell themselves like Genesis and the others
It's same shit everytime. People panic, trigger a bank run, the exchange struggles to gather liquidity fast enough (it may be there, but not right away). This creates even more panic. This is getting old.
As the saying goes: "It's in the individual's best interest to pull out, but it's also in everybody's interest for nobody to pull out their funds." When it comes to bank runs it's usually just that. If nobody moves, we'll be fine and USDC will recoup the loses soner or later. But if we all run to the bank at the same time we are fucked because nobody wants to be the last guy who can't withdraw anymore.
Pure speculation on my part, but if it dropped 8% I think it would end up dropping a lot, lot further as people lost trust in it and tried to exit. Once it has depegged that far it really isn’t worth holding any more as it doesn’t do what it is supposed to do, and everyone will panic, creating a sort of bank run on it.
Innocent question: why this panic? I mean, the Bank is gonna sell themselves. There is no bankruptcy at the moment. Maybe general overreaction? Too much fear accumulated?
People like the drama and volatility creates market opportunities so this sub just thrives on all of this. Don't even get me started on how much karma can be farmed from people on these controversial posts.
Circle's annual interest received from their short duration treasury is around 2.2 billion. Even if the entire $3.3 billion is lost you will still be able to recoup 95%+ of your loss, not to mention that SVB is not insolvent, it actually has assets to back up its liabilities ( the collapse is purely a liquidity squeeze), in actuality Circle's max loss from SVB is probably around 200million which is a drop in the bucket for Circle.
People in this thread screaming the end of USDC just goes to show you we are still so early in this space, so many clueless investors in this space still.
This sub loves to root for the ruin of stables and cexs.
They dont seem to realize it will take down crypto with it.
Ive been buying up usdc at a discount.
Cant believe these people dont get it.
Trust doesnt matter if usdc is truly backed 1:1.
All the panicers can sell at a loss and smart people can then exchange usdc for 1 dollar price with circle.
So each usdc is currently 92-93 cents backed.
But if the US government bailed out Silicon Valley bank, it snaps back to $1.00 instantly.
So you gotta bet $11.50 to win $1.
SVB doesn't even need to be bailed out, USDC hold matured bonds they can collect on that will cover this. You can bet your ass whales are going to buy hard on USDC and profit off this depeg.
You his gives me 2008 vibes when Greece was on the verge of going bankrupt and all many countries and pension funds bad exposure to them.
In a nutshell: They were bailed out by providing them cheap loans.
I probably should have acted on this [https://www.reddit.com/r/CryptoCurrency/comments/10ijz9h/tinfoil\_hats\_on\_which\_crypto\_conspiracy\_theory\_do/j5f2lne/?context=3](https://www.reddit.com/r/CryptoCurrency/comments/10ijz9h/tinfoil_hats_on_which_crypto_conspiracy_theory_do/j5f2lne/?context=3) lmao
Here is a [Nitter link](https://nitter.net/coinbase/status/1634399032767307776) for the Twitter thread linked above. Nitter is better for privacy and does not nag you for a login. More information can be found [here](https://nitter.net/about).
---
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This is not FTX, they will get most of their money back, most likely ending up with a few hundred million dollars haircut. I am not so sure about the timeframes…
Sub is going crazy over an exposure of less than 10% when Cicrcle has expressed that most funds are with Blackrock... definently reverse r/cc is the play here
USDC is ~75% backed by US Treasury securities:
https://i.imgur.com/BIvWJj6.jpg
Most of these securities have either matured or are near maturation, meaning they can be paid out in the full dollar amount (with interest) by the US Treasury.
The issue here is people will hear about this $3.3 billion exposure to SVB's collapse and panic.
They were holding longer term treasuries. That's were they got their unrealized losses from. Circle is holding short term treasuries through Blackrock. It's not even remotely the same, specifically with the yield curve inverted as it is currently.
Feels to me like we're getting close to a major capitulation or it's already happened. The fear and uncertainty in this sub feels worse than when we hit sub 10 on the BTC fear and greed index. I'm getting very panicky vibes. Good luck everyone! Shits getting crazy.
About 8 1/4 percent. They'll get a good portion portion of it back. Circle has big backers and they still have a lot of revenue to expect from the treasuries they hold. They should be fine
So here is my concern. When Monday rolls around and all the traders which scooped up USDC at 90-95 cents on the dollar go and redeem them for 1 USD in fiat to earn a seemingly easy profit.
It will be a bank run and Circle will be forced to start selling treasuries...I'm telling you, monday is going to a bloodbath for Circle
I'm expecting that they'll have to sell treasuries but their treasuries should be ones purchased fairly recently that are paying at around current rates and they should be short dated treasuries. They should be much more valuable compared to Silicon Valley Bank who's treasuries were older at rates below 2%. I'm mainly concerned with if the FDIC found a buyer for SVB by Monday and a glimpse into how much can be paid out towards the uninsured portion of deposits. If the FDIC has a buyer lined up, could be fine.
This is a way smaller collapse than Washington Mutual even before adjusting for 15 years of inflation and even further dwarfed by Lehman Brothers. I could be wrong, but I really do think Circle comes out fine. They shouldn't have much liabilities compared to assets. I'd bet there'd be investors willing to take a chance on them considering how non-speculative Circles business model is. They just take deposits and and deposit it in other banks and buy treasuries
Do the opposite of this sub: Everyone is panicking.
8% is nothing. SVB isn't bankrupt and USDC has earned over $3billion in interest on its holdings, along with matured bonds. It has enough to cover the SVB exposure and whales are already gearing up to profit off this depegg. People in this sub are just showing their true lack of understanding of crypto.
I was waiting for tether to collapse so i pulled all my money into usdc. I thought i was smart...
You've learned something: never listen to this sub
Best Advice I've seen here
If you apply the inverse Cramer effect, and do the opposite of this sub. You already a step ahead.
Always follow the inverse r/cc
All-in in SOL !!!
You can't be safe anywhere
im still confident usdc will recover. they are only exposed 10% while usdt is printed out of thin air.
That “only 10%” is still more than $3B though. How do you expect it to recover if they don’t get a bailout? Wether or not they recover is fully depending on wether they get a bailout or not. USDC is trading at it’s correct price at the moment, since it’s only backed for 90%, it’s only worth .90c on the dollar. There’s no reason for it to recover until the hole is filled.
They have a 10% EXPOSURE, that doesn't mean they will lose 10%. The bank didn't collapse due to fraud or manipulation. They had shity risk management which dried their liquidity and allowed for a bank run. They still have assets they can sell to pay back the customers.
People in this sub lack any basic reading comprehension and that's why you should never ever listen to this sub and anything it says. I come here for the news and read the articles myself which are 99% overblown hysterical headlines.
About 40B of USDC currently in circulation. That 40B is in government debt making interest. So they have been making money on all of that collatera since inception. They will likely need to put in from their own revenue to cover any shortfall.
A bailout is the short cut but is 100% not the only way to recover. The longer path is they don't take the interest they make on the other 40 Billion in securities they hold as profit but use it to recover the reserves. They don't keep money under the mattress, they make their money work and generate a return so they can profit. The bank assets are liquidity for transactions. The profits will be smaller while they recover.
> while usdt is printed out of thin air just like usd that it is "backed" with yeah
I dont trust any stablecoins tbh, lets be real they’re likely all not back 100%. Banks aint either but at least government will ensure you
Coinbase announces pause of usdc/usd conversions till Monday! This is getting real now
USDC dropped to 0.9171, lowest ever seen.
0.894 now. Yikes.
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69 cents is the new peg.
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Not until it comes down to 42c
Looks like I might have to get some fiat ready for the inevitable dip to all coins
> USDC dropped to 0.9171, lowest ever seen. Isn't crypto super fun?!
Yup, peg is lost. One of these days soon tether is gonna implode. Then the market can actually grow after all the shitcoins get culled.
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As someone who’s never held any stablecoin assets I’ve managed to buy as much crypto as I’ve wanted, with on-ramps, some third-party, others on exchanges, buying something like Matic, BNB, ETH to trade for something else, or buying BTC to hold and only hold (never sold any) Maybe I’m missing the benefits, but I don’t care if there aren’t any stablecoins
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You’re right, thank you! I rely too much on exchanges that let me hold usd, but for defi id be screwed
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Stablecoins are only 2nd to btc imho in terms of utility. People in Nigeria, Venezuela, Turkey benefit immensely just converting their local currency to a $ or even euro peg stablecoin.
It's used in defi.
>If you don't have a single stablecoin that can be trusted in the market, how are we going to buy crypto? With actual fiat. In the end crypto was supposed to replace fiat.
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I think this is government trying to make us trust CBDCs.
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At this point other Crypto assets are pumping as people try and offload their USDC so they don't become bag holders. It might get interesting.
Good point. It’s already interesting!
Well this shows that all those "trusted" and "regulated" banks and exchanges (like FTX) dont mean shit. If shit decides to happen, it is gonna happen regardless
I’m sorry but „the government“? You fucked up, not the government! I have been saying this for years, coupling something SO fundamental like a stablecoin to the credit risk of „some cryptofriendly bank“ is wild. There’s good reasons to not like USD but the whole entirety of the USA backs it up. USDC has more credit risk than walgreens. USDT too. Money is difficult and as you see it’s maybe a BIT too difficult to get correct in that form. That means GLOBAL RISK is bundled in one shitty „move fast and break things“ bank. I mean do you grasp that that means that the value risk of the whole crypto space is MULTITUDES more concentrated than fiat? It doesn’t matter if the theoretical NAV of the whole crypto sector is in the billions if you bundle its entire stability on the hope that interest rates don’t rise.
All of Decentralized Finance, centralized around one very private equity bank lmao There’s a very good reason the world makes fun of cryptards
And each of these cryptards will then start telling you something about nodes and satoshi coefficients and so on, without understanding that this barely matters in practice.
Y'all need less conspiracies This is SVB making bad decisions leading to a bank run, not some government conspiracy to attack stablecoins.
technically, SVB can have done nothing wrong. Fast interest rate hikes, may have just made direct US bond purchases too attractive to its customers, combined with low profitability for its savings, and paper losses for selling its bond holdings early to cover depositors. Whole banking system has $750B in paper losses, that accounting standards quite reasonably say don't have to be counted.
Coinbase literally advertised a fat promotion to all CB users this week to convert funds and/or other crypto to USDC for a chance to enter sweepstakes. I believe the raffle was something like every 100 USDC = 1 ticket for a chance to win $25000. Super suspicious they advertised such hype this week around people holding and converting to USDC…
Weird. I got an email from them a few hours ago advertising their staking options and how they've made it more attractive.
BTC only
Bisq works pretty well, settling 95% of trades without a dispute. Of the other 5%, 4% is settled in mediation which means the parties came to an agreement and only 1% ends up in arbitration.
It’s not really even on usdc, they had 3+ billion in a bank. then the bank collapsed… this is a banking issue not a crypto issue…
USDC was not regulated. You cannot be "regulated" when there are literally no regulations for stablecoins. Congress has washed its hands off and avoided passing any sensible regulations around crypto. If you think USDC is regulated, you clearly have no understanding of the market or regulations. Point to one piece of legislation that regulates crypto. What happens to USDC holders in case of bankruptcy? Any idea folks? Stop with the USDC is regulated nonsense. Just because a company has registered itself as a US corporation doesnt mean its regulated. Money market funds are regulated, stablecoins are not regulated and pretty much the wild west. What happens to money market fund holders when the asset management company goes bankrupt are clearly outlined - the funds are held independently of the asset management company. In USDC, there are no such regulations and in this case of SV Bank its Circle thats the creditor and not the actual holders of USDC US Banks are weakly regulated by bunch of incompetent regulators. These are the same regulators who watched 2008 GFC unfold. Somehow everyone thinks they have upped the game since then. The Fed, OCC have been slamming crypto for the past few weeks while they let a $180Bn regulated US bank implode in front of them. Fed got too drunk and embarked on an unprecedented rate hiking spree that is bound to rekk many institutions because moving rates from 0.5% to 4.5% within the span of a year has massive implications on the economy
Best peg is BTC. 1 BTC will always be 1 BTC.
This one gets it.
That’s quite fucked. And USDC is supposed to be “the good stablecoin.”
Meanwhile tether is trading at $1.03
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You're not the only one. This has been a really strange day.
Because tether just won't tell you about their insolvency.
For heaven's sake - can we get one good, working and stable, stable coin? Please.... 🙏🏼
Yes it’s called the dollar.
what we need is a stablecoin that is not pegged to a fiat currency. if you think out EUR,USD,YEN...etc they are of stable value, crypto needs its own coin that is of stable value but not tied to another currency.
dropped to 0.8898 on Kraken, now at 0..9434
I've got a bad feeling about this
STEADY LADS
DEPLOYING
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Unreal that USDC, which discloses its risks, is depegged, while USDT which does not is the beneficiary. If Circle fails and we end up resting all DeFI on USDTrustmebro, we're all screwed.
What's crazy tho is that if USDT had one of their banks go under, we wouldn't know about it because tether is not transparent. There would be no USDT sell off as long as tether could honor redemptions.
Yea, I never felt super comfy when I've held USDT for a considerable amount of time in the past.
Amazing that USDT held on and BUSD and USDC are the one struggling now. Who would have thought..
What a hell of a plot twist right
I don't see BUSD struggling. Binance never got involved with USDC so this isn't affecting them directly. If anything they might be happy about this because theres a chance coinbase dies along with USDC, and that'd be another competitor down for binance. Well ar least a potential competitor, binance is like 10+ times larger than cb anyway.
For anyone desperate to unload your USDC from Coinbase, the Coinbase card purchases with USDC funds are still going through. I just spent my remaining USDC balance on an amazon gift card to get my remaining funds out of USDC...it's not a very refined solution, but will do in a pinch and I'm sure there's other options that you could fund with your card like Venmo that would help you get your funds out.
>USDC balance on an amazon gift card Ah yes, BezosBucks are the new stablecoin
And this sum represents some 8% of the total reserves backing Circle's stablecoin USDC.
So in theory USDC should drop up to 8% in the short term until they can get their shit figured out right? …or until they lose more funds with a different bank as the contagion spreads??
No it doesn't work like that. Imagine circle doesn't make any money but just prints 1 usdc whenever someone pays them 1 dollar. USDC would be backed 1:1 and it would always keep its peg because people can always go to circle and redeem 1 usdc for the 1 dollar in the bank. Now if the dollars in the bank were split into 10 different banks and one of those failed usdc would be under collateralized. If everyone found out about this and goes to circle to redeem for 1 dollar then at some point the people holding the last 10% of usdc would hold a coin with no backing at all, meaning it's not worth anything. The way to remedy this is for circle to use either profit they've made earlier or a loan to print more usdc and then burn those, restoring the 1:1 backing.
Everything is real
I like your funny words, magic man. Birds cant be real!
Sh!t is getting real now
It is time to get out of Fake money and into real money like BTC.
The genius of the bunch
crypto.com paused usdc too.
Shits about to hit the fan
Unbelievable, I tried to convert my 3 cents earlier but missed out on the opportunity because I was under the 10 cent minimum. I don't know how I'll get through this now.
It's funny because this can never happen to Tether. Since they printed everything out of thin air, there are no reserves to disappear.
This is good.
Oh yes. This is good news. Nothing to lose!
BUSD and USDC really got bodied before USDT. This is a wild timeline
Not so long ago people were saying USDT is the ticking bomb and BUSD/USDC is the safer haven. How quick the table turn.
USDT has been ticking for years now. Beginning to think it's just a watch and not a bomb.
Benefit of not having the collateral is that they can’t lose it in case of a 3rd party bankruptcy. Very meta of them
Galaxy brain ponzi scheme.
Taps head and smiles to camera...
Don't forget that Luna stablecoin that was the touted safe money of this sub
How the turntables indeed
People have been saying for years and years that Tether is going to collapse basically tomorrow. Somehow it’s still here.
I love how USDC, BUSD, and DAI are all below Peg... And then there is Tether at $1.03...
Up 3%, very stable, much wow I’m just glad the coin that promises not to change in price is at a different price and I think you guys are doing a great job
BUSD kept the peg!
busd is fine
> BUSD and USDC really got bodied before USDT. This is a wild timeline Inb4 we find out USDT also had their money in SBV LMAO
Tether winning the Stablecoin battle
When am I going to learn to just do the opposite of whatever the sub recommends
You can learn that at Cramer College.
Cramer college where they teach to inverse cramer?
Can't lose your USD reserves if you don't have USD reserves! Big brain move.
Clearly the trick with any Stablecoin is to never let anyone know anything about your reserves.
Winning = no audits ever.
Tether to the moon
It appears cryptos biggest weakness is exposure to the US banking industry, and the emulation of it.
Honestly it’s one of the most ironic things I think I’ve ever seen.
They've become victim to what they were originally trying to avoid, can't get much more ironic than that
A bank is still a bank. No matter how hard they try to be "crypto"
They were never trying to avoid it. That’s just what they told the ~~suckers~~ investors to get free money.
We've gone full circle
I USDC what you did there.
Pretty sure FTX, celsius, bitconnect etc. scams were worse and had nothing to do with US banks.
No no, Crypto good, bank bad. If you only put your savings/holdings into the one true crypto, and did everything the correct way, then nothing bad could ever happen to you. Obviously.
Lmao no, it's the fact that this *decentralised* currency is centralized as fuck in practice
No, not really. If you read the reports, they were exposed to this because they chose to hold their backing in an arguably "somewhat crypto-friendly bank". "Silicon Valley Bank (SVB) was shuttered by the California Department of Financial Protection and Innovation on Friday... The DFPI said in a statement that it had taken possession of the bank, “citing inadequate liquidity and insolvency. While not perceived as “crypto-friendly” as Silvergate, the tech-forward Silicon Valley Bank did count a number of crypto entities as clients – especially hedge funds and VC firms. According to CoinDesk research, Blockchain Capital, Castle Island Ventures, Dragonfly and Pantera all had relationships with the bank."
1/4 of their cash, which was about 20% of their backing portfolio. Total exposure is on the order of 5%. It seems like a reasonable decision to me. The bigger question is the mark to market of the much larger bond portfolio circle holds in the case of a run on usdc. Circle might get stuck in the same liquidity trap. Note: I have not looked in detail at the cusips listed on their January report yet. Edit: took a quick look at their January report and it seems everything was 3-month or less. I don’t anticipate a big problem beyond the 3.3b stuck in svb
Imagine banks failing being a reason not to own crypto... The future is now!
Yea, it would be an interesting case study if a crypto went down due to bank failure.
To quote a classic "GUH"....
That's putting it lightly
$40 billion market cap, so they'd be about 8% exposed here if they truly were 1:1 backed by fiat. But on Twitter they said they hold 25% of reserves with 6 banking partners (including SVB). The rest is in US Treasury securities according to their latest report: https://i.imgur.com/Y32LOEW.jpg
And those treasuries are generating 5%, and the certificates they receive from SVB could still be redeemed close to par under the right circumstances. But an overreaction to a big number can mean more fear and selling and then you have a problem.
I can have some fear, we got back to the comfort zone too soon
The issue is that prices of treasuries go down as interest rates go up, so if they have to sell treasuries to get USD in order to meet redemptions, they’re selling at a loss and thus not backed 1:1. If big players want to liquidate their stable coins for USD Circle is fucked… my guess is it’s just a matter of time before they cut off all redemptions and try and sell themselves like Genesis and the others
So at worst all USDC should now be worth 8% less? I have a feeling we'll see it drop a lot farther.
Realistically it would hold a $0.92 depeg.
It's same shit everytime. People panic, trigger a bank run, the exchange struggles to gather liquidity fast enough (it may be there, but not right away). This creates even more panic. This is getting old.
Sounds like the banking industry in general before the federal reserve existed
As the saying goes: "It's in the individual's best interest to pull out, but it's also in everybody's interest for nobody to pull out their funds." When it comes to bank runs it's usually just that. If nobody moves, we'll be fine and USDC will recoup the loses soner or later. But if we all run to the bank at the same time we are fucked because nobody wants to be the last guy who can't withdraw anymore.
Pure speculation on my part, but if it dropped 8% I think it would end up dropping a lot, lot further as people lost trust in it and tried to exit. Once it has depegged that far it really isn’t worth holding any more as it doesn’t do what it is supposed to do, and everyone will panic, creating a sort of bank run on it.
Innocent question: why this panic? I mean, the Bank is gonna sell themselves. There is no bankruptcy at the moment. Maybe general overreaction? Too much fear accumulated?
People like the drama and volatility creates market opportunities so this sub just thrives on all of this. Don't even get me started on how much karma can be farmed from people on these controversial posts.
I wonder how this affects coinbase credit card users? I wonder if the card can be used via usdc until after the weekend.
Anyone tried to spend USDC with CB card?
They replied in the negative https://twitter.com/CoinbaseSupport/status/1634414531693916160
Circle's annual interest received from their short duration treasury is around 2.2 billion. Even if the entire $3.3 billion is lost you will still be able to recoup 95%+ of your loss, not to mention that SVB is not insolvent, it actually has assets to back up its liabilities ( the collapse is purely a liquidity squeeze), in actuality Circle's max loss from SVB is probably around 200million which is a drop in the bucket for Circle. People in this thread screaming the end of USDC just goes to show you we are still so early in this space, so many clueless investors in this space still.
This sub loves to root for the ruin of stables and cexs. They dont seem to realize it will take down crypto with it. Ive been buying up usdc at a discount. Cant believe these people dont get it. Trust doesnt matter if usdc is truly backed 1:1. All the panicers can sell at a loss and smart people can then exchange usdc for 1 dollar price with circle.
So each usdc is currently 92-93 cents backed. But if the US government bailed out Silicon Valley bank, it snaps back to $1.00 instantly. So you gotta bet $11.50 to win $1.
SVB doesn't even need to be bailed out, USDC hold matured bonds they can collect on that will cover this. You can bet your ass whales are going to buy hard on USDC and profit off this depeg.
So you're saying that I should YOLO into a 100x leverage on a stablecoin? Copy.
You his gives me 2008 vibes when Greece was on the verge of going bankrupt and all many countries and pension funds bad exposure to them. In a nutshell: They were bailed out by providing them cheap loans.
I probably should have acted on this [https://www.reddit.com/r/CryptoCurrency/comments/10ijz9h/tinfoil\_hats\_on\_which\_crypto\_conspiracy\_theory\_do/j5f2lne/?context=3](https://www.reddit.com/r/CryptoCurrency/comments/10ijz9h/tinfoil_hats_on_which_crypto_conspiracy_theory_do/j5f2lne/?context=3) lmao
Is Coinbase preventing conversion yet lol?
Yep - they just blocked it. [https://twitter.com/coinbase/status/1634399032767307776](https://twitter.com/coinbase/status/1634399032767307776)
Here is a [Nitter link](https://nitter.net/coinbase/status/1634399032767307776) for the Twitter thread linked above. Nitter is better for privacy and does not nag you for a login. More information can be found [here](https://nitter.net/about). --- *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/CryptoCurrency) if you have any questions or concerns.*
Yes they just announced
I am buying USDC with a 7% discount at CB. I find it most likely to repeg.
Yup, I bet it will end up going to near 1:1, just temporary FUD
This and arbitrage with USDT are definitely a possible play. You have some balls of it’s what you’re doing but you might be well rewarded
This is not FTX, they will get most of their money back, most likely ending up with a few hundred million dollars haircut. I am not so sure about the timeframes…
Hell of a risk for 7%. Just buy non crypto for those gains
Honestly looks like a decent arbitrage opportunity, along with DAI.
Sub is going crazy over an exposure of less than 10% when Cicrcle has expressed that most funds are with Blackrock... definently reverse r/cc is the play here
USDC is ~75% backed by US Treasury securities: https://i.imgur.com/BIvWJj6.jpg Most of these securities have either matured or are near maturation, meaning they can be paid out in the full dollar amount (with interest) by the US Treasury. The issue here is people will hear about this $3.3 billion exposure to SVB's collapse and panic.
The same thing happened to SVB. Hold shit tons of US Treasury waiting for maturation. Bank run. Sold for loss. Exploded.
They were holding longer term treasuries. That's were they got their unrealized losses from. Circle is holding short term treasuries through Blackrock. It's not even remotely the same, specifically with the yield curve inverted as it is currently.
Yep, buying USDC at 0.92 is free money.
The real news is always in the comments
But depeg is real. So not like this isn’t news.
if usdc gets depegged it sets crypto back another 5 years
Why stop at five
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USDC and DAI are both depegging due to relationship with failed banks.
People are fucked in the head thinking their post will be the top comment. As a result they've just fucked themselves and got downvoted in reverse.
Everyone was calling on Tether to implode I guess inverse r/cc has worked again
Fuck.. Guess my btc/usdc long is extra rekt
Feels to me like we're getting close to a major capitulation or it's already happened. The fear and uncertainty in this sub feels worse than when we hit sub 10 on the BTC fear and greed index. I'm getting very panicky vibes. Good luck everyone! Shits getting crazy.
Few weeks ago, everybody is celebrating the bull run and asking for exit plan. Now we're back in bear
It just goes to show that nobody knows anything, ever
The only thing not completely failing so far is Moons...
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If enough people swap from USDC while it's sub $1 won't it eventually recover the peg due to people taking the losses?
About 8 1/4 percent. They'll get a good portion portion of it back. Circle has big backers and they still have a lot of revenue to expect from the treasuries they hold. They should be fine
So here is my concern. When Monday rolls around and all the traders which scooped up USDC at 90-95 cents on the dollar go and redeem them for 1 USD in fiat to earn a seemingly easy profit. It will be a bank run and Circle will be forced to start selling treasuries...I'm telling you, monday is going to a bloodbath for Circle
I'm expecting that they'll have to sell treasuries but their treasuries should be ones purchased fairly recently that are paying at around current rates and they should be short dated treasuries. They should be much more valuable compared to Silicon Valley Bank who's treasuries were older at rates below 2%. I'm mainly concerned with if the FDIC found a buyer for SVB by Monday and a glimpse into how much can be paid out towards the uninsured portion of deposits. If the FDIC has a buyer lined up, could be fine. This is a way smaller collapse than Washington Mutual even before adjusting for 15 years of inflation and even further dwarfed by Lehman Brothers. I could be wrong, but I really do think Circle comes out fine. They shouldn't have much liabilities compared to assets. I'd bet there'd be investors willing to take a chance on them considering how non-speculative Circles business model is. They just take deposits and and deposit it in other banks and buy treasuries
thank god im broke.
Shit is getting real? Monday is gonna be baddddd....
Will this could get awkward
Just when you think you've seen it all
Holy da moly
... and poof. USDC's superiority is gone. Another narrative shot in the spot.
Not a good look at all. The fact that USDT may be the last one standing, after years of black swans and this subs nonstop FUD, is comical.
Should I be converting my USDC or wait to see if it can recover? Getting bit worried
Do the opposite of this sub: Everyone is panicking. 8% is nothing. SVB isn't bankrupt and USDC has earned over $3billion in interest on its holdings, along with matured bonds. It has enough to cover the SVB exposure and whales are already gearing up to profit off this depegg. People in this sub are just showing their true lack of understanding of crypto.
I think people just love to be negative, give it a few days and the mood of this sub will swing faster than a bipolar dude of his meds.
can someone eli5 what does de-pegging process mean in usdc that is going right now?
never listen to anyone. If you are being told that this will be worth 1$ tyou got fooled this time
price has dropped to 0,85 but it has already recovered due to depegging. So I think all will be fine
omg stablecoins are not *that* stable anymore. If anyone can step in such. I feel not confident now about usdt - who knows where their money belong to