Tuesday, March 21, 2023
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With $200M in crypto liquidations, Bitcoin recovers to $20K, some traders dismiss USDC concerns

Following a sharp decline on Friday due to contagion risks from the failure of Silicon Valley Bank spreading to the cryptocurrency markets, notably the exposure of Dollar Coin-issuer Circle to the bank, bitcoin and ether increased by as much as 4% during the last day.

On Saturday, bitcoin (BTC) surpassed the $20,000 milestone while ether (ETH) increased above $1,450 to show early signs of market stabilisation. On Friday, both tokens dropped below significant resistance levels.

Nevertheless, other cryptocurrencies did not record comparable gains, indicating that traders have not yet taken a chance on less well-known tokens. In the late afternoon hours of Saturday in Asia, Polygon’s matic (MATIC) rose 1.6% while BNB Coin (BNB) and XRP rose nominally by 2%.

The total market value of cryptocurrencies dropped below $920 billion for the first time since November, and over $200 million worth of futures that follow cryptocurrencies were liquidated in the previous day.

The largest liquidation of major cryptocurrencies, close to $60 million in bitcoin futures, was followed by a $40 million liquidation of ether futures. Such liquidators probably played a role in the decline of ether and bitcoin.

When a trader lacks enough capital to maintain a leveraged deal open, liquidation occurs.

Other market commentators dismissed lingering USDC concerns by highlighting the token’s support by the U.S. treasury.

80% of their assets are 6 million US T-bills, according to a member of the Crypto Twitter community. “In the last three months, 85% of these invoices have been rolled over. The risk of interest rates is negative.

The fact that SVB is FIDC-insured, according to Adam Cochran, partner at crypto fund CEHV, suggests that worries about the durability of USDC are unfounded.

The entity received 62% of its holdings immediately under the FDIC’s “advanced dividend” method, and by the time of the last payment, it had recovered 94%, according to Cochran. If SIVB is similar, Circle’s maximum damage is $198M on $3.3B.

In another tweet, North Rock Digital co-founder Hal Press stated, citing official papers, that 77% of Circle’s reserves were stored in U.S. treasury bills, indicating that the USDC theoretical floor price was 77 cents.

“Circle owns 1-4 month T-bills for 77% of its reserves. Blackrock is in charge of these T-Bills, which are kept at BNY Mellon. This gives USDC a 0.77 absolute floor, according to Press.

Patrick Huston
Patrick Huston
As a senior editor, Patrick is a professional who is in charge of putting out business news. As a senior editor, Patrick is likely to be in charge of the duties of junior editors and writers, make sure the content is correct and high-quality, and work with other departments to make sure the business news is published on time. Patrick knows a lot about business and the latest market trends. He uses this knowledge to choose and edit stories that are both interesting and useful to readers. He also works with reporters and analysts to come up with insightful pieces that help readers keep up with the latest business news. Patrick is a very important part of keeping the public informed and interested in important business issues. He is passionate about journalism and strives for excellence.

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