Backgrounds of USDC price fluctuations
The value of USDC has fluctuated significantly in the last 24 hours. We want to uncover the background that has led to the abnormal value formation of the USDC.
Recently, many US banks have been put under the magnifying glass due to possible financial problems. Last week this led to the closure of Silvergate. This week, the situation has led to Silicon Valley Bank being liquidated.
Circle, the company behind USDC, announced a few hours ago that approximately $3.3 billion of the assets guaranteeing USDC have been deposited in Silicon Valley Bank. This corresponds to about eight percent of the assets guaranteed by the USDC. Circle also announced that USDC redemptions into US dollars will be on a pause for the weekend. Normally, the value of USDC closely tracks the value of the US dollar, but the current situation has resulted in significant price volatility for USDC. The price fluctuation is expected to continue for the next few days or weeks, until the fate of the funds acting as a guarantee is clarified.