Next week, 50% of uninsured deposits will be returned, according to insiders.
There may be rescue operations going less than 72 hours following the collapse of Silicon Valley Bank, as stated in a March 11 article by Bob Elliot, a chief investment officer of Unlimited Funds (SVB). To back up his claim that “large banks [are] actively working on purchasing svb firm,” Elliot added that “50pct of uninsured paid out next wk” and that the United States Federal Deposit Insurance Corporation (FDIC) was planned to cover 95% of uninsured depositors to the acquirer.
Cointelegraph previously revealed that Circle, the issuer of the Dollar Coin stablecoin, held more than $3.3 billion of its $40 billion holdings with the failing bank. Furthermore, Andreessen Horowitz, Pantera Capital, and Paradigm, three of the most well-known blockchain venture capital companies, have indicated that SVB has around $5 billion in funds for its operations. Today, USDC depegged from its one-to-one peg to the U.S. dollar and traded as low as $0.87 before gradually repegging to $0.95 at the time of writing.
While the reports are presently unverified, various sources agree that numerous pathways to resolution are being pursued and that depositors would get “at least 50 percent of their deposits” by the following week. “Long term it’s conceivable they receive 90%+ back and quite feasible no depositors loses a single $,“ Hal Press, founder of investment company North Rock, claimed.
Mike Mose, associate director of the business advice company CrossCountry Consulting, made identical remarks on the same day, citing secondary sources.
“On Monday, $250k will be unfrozen for SVB clients, and 50% of the remaining cash will be distributed to depositors within 1-2 days (money market accounts will likely get 100%). The remaining will rely on subsequent recoveries; the majority will occur within three to six months.”
Earlier, decentralized finance expert Loki Zeng assessed the net worth of USDC to be “$0.885 in a worst-case scenario and $0.985 in a typical scenario” and said, “even if there is a problem, it will not be as severe as FTX.”
And according to Alex Svanevik, CEO of blockchain analytics company Nansen, the Circle and USDC “can make it” if “top-class execution” is carried out in the coming days. At the time of writing, the Dai stablecoin, which is approximately 3.1 billion USDC also collateralizes, has reduced most of its losses and trades at $0.97. After the USDC depegging occurrence, DAI’s issuer, MakerDAO, issued an emergency proposal revising protocol risk criteria earlier today.
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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
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