On Kraken, USDC/USDT fell as low as $0.94, its lowest since April 2021. When panic from the bankruptcy of Silicon Valley Bank spread, Circle Internet Financial’s USDC stablecoin, the second-largest stablecoin by market capitalization at $42 billion, got depegged from the U.S. dollar.
On Kraken, the USDC/USDT trading pair reached a low of $0.94, the lowest price since April 2021. Saturday, it has risen to around $0.984.
USDC is intended to maintain a 1:1 parity with the U.S. dollar, but on Friday, concerns about the effect of Silicon Valley Bank’s bankruptcy pushed it below $1.
A part of USDC’s financial reserves is held at the now-failed bank, causing worries that the stablecoin’s supporting funds are trapped. Stablecoins such as USDC are the foundation of the cryptocurrency industry. When they deviate significantly from $1 (or whatever fiat asset they’re tied to), it raises concerns about their financial stability.
Circle did not reply to several requests for information, although the payment services business tweeted on Friday night, “Circle and USDC are operating regularly.”
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.