USDC, one of the largest stablecoins, has lost its USD peg and hit its all-time low on Saturday, March 11, after Circle announced that Silicon Valley Bank (SVB) held some of its cash reserves.
USDC hits its all-time low as SVB collapses
Circle, the company behind USDC, revealed that $3.3 billion of its $40 billion USDC reserves were held at the collapsed, crypto-friendly lender, Silicon Valley Bank. The stablecoin broke its 1:1 USD peg and plunged as low as $0.88 on Saturday, then recovered slightly and is currently being traded at $0.95.
Silicon Valley Bank crashed on Friday, March 10, and made history as the largest US bank collapse since the 2008 financial crisis. The collapse left global markets in chaos, and billions of dollars from investors and companies were stranded therein.
Investors have been on their toes since the news and have cashed out more than $2.6 billion USDC on Saturday. Coinbase, a major crypto-exchange platform and USDC co-supporter, temporarily suspended the conversion between stablecoin USDC and USD. The platform, however, assured the investors that their assets remain safe & available for on-chain transactions.
Circle, USDC’s issuer, said that SVB was one of the six banks that held USDC’s cash reserves and that USDC would still be operational without the 7% reserve held at SVB. Several other crypto companies have announced their connection with Silicon Valley Bank (SVB) and how the contagion has affected them. The major companies that held their money in SVB include:
Yuga Labs
Yuga Labs, the $4 billion firm behind major NFT projects such as the Bored Ape Yacht Club, is exposed to SVB. The company’s co-founder, Greg Solano, announced that the firm has ‘super limited exposure’ to the failed crypto-friendly bank but did not disclose how much money was held at SVB.
The official further said that the SVB scenario has no impact on the firm’s plans and business but urged investors to be supportive of other tech/crypto companies that might be affected.
Pantera
According to an SEC filing last month, Pantera has an unknown amount of money held at SVB. The crypto-focused venture capital company mentioned SVB among the three significant custodians of the company’s private funds.
BlockFi
BlockFi, the collapsed crypto lender, filed for bankruptcy in November and held $227 million in a money market mutual fund at SVB. The documents filed on Friday related to the company’s bankruptcy proceedings show that the funds at SVB were not insured under the Federal Deposit Insurance Commission
(FDIC).Other NFT players exposed to SVB include Proof, Avalanche, and Nova Labs.
Effects of the Silicon Valley Bank Contagion on NFT floor prices
Due to disruption, most top NFT collections have attained lower price floors within the last 24 hours. Moonbirds have hit a low of 4.75 ETH ($6,965.44) and a decline of 25.6%. Otherdeed for Otherside has decreased by -0.7% with a price floor of 1.71693123155962 ETH ($2,515.50).
Here is a table showing the top ten NFT collections by price floor, market cap, and total volume:
Top 10 NFT collections’ price by 24H Trading Volume Source: Coingecko
The swings in the crypto industry brought by the latest development, the fall of SVB and Silvergate, have shaken the DeFi sector as the markets struggle to regain their glory since the November 2021 winter.
Source: nft.news
This news is published and verified by the NFT News media team.
