Just as we thought the worst phase of this crypto winter was over, we are hit with more devastating news seemingly on a monthly basis now.
Circle, the issuer of the USDC stablecoin has just announced it had $3.3 billion in exposure to Silicon Valley Bank, which collapsed earlier today and was placed in FDIC receivership. From the total of roughly $40 billion USDC reserves $3.3 billion is 8.2% which is no laughing matter.
Following the news the USDC has consequently depegged from the 1 to 1 US Dollar value and is currently sitting at $0.91 as we speak, lowest ever seen.
Furthermore, Coinbase announces pause of usdc/usd conversions till Monday! This is extremely worrisome and if USDC depegs for real anyone with crypto investments is going to be hit hard, not just USDC holders similar to how it went when UST collapsed.
Ironically, USDT, generally most controversial stablecoin in the crypto community seems to be holding the strongest in this crypto winter. I guess one could say this is the power of organized crime.
One could only hope that this isnt the straw that breaks cryptos back after what was already a disastrous while stemming from recent news such as the crypto oriented bank Silvergate collapsing earlier this month, Biden clamping down on crypto wash sales, the uncertainty weather we will see big selling pressure from the ETH shanghai update, and generally the degrading public interest in NFTs and crypto in general.
I for one choose to hold on to my crypto investments and patiently watch the events unfold as my crypto is already down over 70% in 2022 alone and as we all know the crypto market does not favor paper hands. What are your thoughts on the near future of crypto, is there any light in the end of the tunnel?