The USD Coin (USDC) stablecoin's market cap fell to $32.5B following withdrawals surpassing $10B within two weeks.
The
rising sell-off trend was mainly triggered by the three consecutive
crypto-friendly bank collapses in the U.S. earlier in March.
- March saw the collapses of crypto-friendly Silvergate Bank, Silicon Valley Bank (SVB), and Signature Bank in just a week.
- Following
SVB's shutdown, Circle announced that it had $3.3B of reserve funds
held in the bank, and it was able to access the funds in mid-March.
- However, the announcement caused USDC to be de-pegged from the U.S. dollar (USD).
- USDC issuer Circle's CEO,
Jeremy Allaire, assured investors that redemptions will be fully met
with reserves without delay, adding that Circle has never failed to mint
and redeem USDC for $1.
- USDC rival Tether's (USDT) market share increased to 60%, reaching the highest rate since May 2021, after the rise in the USDC outflows.
- A stablecoin is a type of cryptocurrency whose value is pegged to another reference asset, mostly a fiat currency.
- USDT is currently the largest stablecoin by market cap.
