USDC Traders Bet On Possible Rebound After Stablecoin Falls To All-time Lows Of 90 Cents

Coinglass data shows that some $4 million in USD Coin futures were liquidated in the past 24 hours. However, the token has since rebounded to just over 90 cents as of Asian evening hours. Some traders are buying the relatively cheap USDC, hoping for a gradual recovery to the $1 mark and a potential 10% gain should the token repeg to the intended dollar mark.

Futures funding rates on the crypto exchange Bybit surged to as much as 0.3% on Saturday morning, offering traders up to 0.3% in fees from their total market position. The funding was paid by traders who shorted USDC, paying over 0.4% to borrow the asset and bet on lower prices.

The collapse of Silicon Valley Bank (SVB) on Friday led to a market-wide drop for cryptocurrencies in the past 24 hours as traders discovered that some of the industry’s major players had exposure to the bank. Stablecoin issuer Circle held a part of its USDC stablecoin’s cash reserves at Silicon Valley Bank as of Jan. 17, according to the firm’s latest attestation.

SBV was one of the six banks that Circle used “for managing the approximately 25% portion of USDC reserves held in cash,” a Circle spokesperson said late Friday.

Elsewhere, Maker’s decentralized stablecoin dai (DAI) also depegged from its intended $1 mark on Saturday amid market stress, hitting an all-time low of 88 cents, CoinDesk reported.

Overall, traders remain optimistic that USDC will eventually recover from its recent decline, though market volatility and the broader economic climate will likely continue to impact the cryptocurrency industry.

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