Heads up. USDC is depegging. Down to $0.93 right now. DAI as well.

Silicon Valley Bank has gone under. Circle, Blockfi, among others affected.

My quick take after panic reading the news is that SVB (Silicon Valley Bank) is one of 6 that held Circle’s cash. Apparently Circle keeps 25% of it’s assets backing USDC in various banks. So some of that will be in SVB. So Circle will likely lose money on this.

Also, Circle cut ties with Silvergate, one of their other banks earlier this week.


EDIT: adding some thoughts

According to [Circle on twitter](

> $3.3 billion of the \~$40 billion of USDC reserves remain at SVB.

USDC market cap was about $43.5 billion before the depeg. So \`7.6% of USDC’s market cap remains at SVB. The question is, how much of that can be recovered?


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16 thoughts on “Heads up. USDC is depegging. Down to $0.93 right now. DAI as well.”

  1. If this isn’t proof that DAI is totally unreliable then idk what is. And Coinbase just halted transfers from USDC to USD, which no doubt is fueling panic even more.

    Side note: anyone else find it hilarious, that after years of FUD, USDT has essentially become the most reliable stablecoin?

  2. The bigger question is what other banks may also fail. There will be massive short attacks and fear-spreading come Monday when markets re-open. I have to imagine the banks that hold Circle’s reserves will also be targeted.

  3. This is crazy. I think they *can* recover given that this wasn’t fraud or theft at a bank, it’s liquidity. I think people will be made whole if the bank is allowed to wind down these treasuries on a schedule as opposed to *dump it all right now immediately no matter the losses*.

    Anyways, I’m in Aave. USDC was my stablecoin borrow of choice. It’s 2 AM where I am. I’m staying up all night. I borrowed some USDT. Ready to pull the trigger on a USDT to USDC swap.

  4. What if we owe USDC right now on DeFi (say you’ve borrowed USDC against your eth).

    What’s the smart move?

  5. Lol

    It was about two weeks ago and I was going to borrow against USDC in Aave to open a long position. Glad I didn’t.

    Side note, if you have borrowed USDC loans, fantastic time to pay them off now and free up your (presumably) non-USDC collateral.

  6. I can’t believe Tether is coming out of this storm intact. I always thought it was the most dangerous and oblique stable coin. You can’t mention the word audit in front of Tether’s CEO…


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