Image default
Crypto

Bitcoin Regains $20K After $200M in Crypto Liquidations; Some Traders Brush Off USDC Fears

Facebook iconLinkedin iconTwitter iconCDCROP: Bear vs Bull Market economy (Pixabay)

(Pixabay)

Consensus 2023 LogoAlex ThornHead of Firmwide ResearchGalaxyHear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.Secure Your SeatConsensus 2023 LogoAlex ThornHead of Firmwide ResearchGalaxyConsensus 2023 LogoHear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.Secure Your SeatFacebook iconLinkedin iconTwitter iconConsensus 2023 LogoAlex ThornHead of Firmwide ResearchGalaxyHear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.Secure Your SeatConsensus 2023 LogoAlex ThornHead of Firmwide ResearchGalaxyConsensus 2023 LogoHear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.Secure Your Seat

Bitcoin and ether rose as much as 4% in the past 24 hours after a steep fall on Friday as contagion risks from the collapse of Silicon Valley Bank spread to crypto markets, specifically the exposure of USD coin-issuer Circle to the bank.

Ether (ETH) rose over $1,450 while bitcoin (BTC) jumped over the $20,000 mark on Saturday to post early signs of market stabilization. Both tokens fell below strong resistance levels on Friday.

Other cryptocurrencies did not post similar gains, however, suggesting traders were not taking risks on lesser-known tokens yet. Polygon’s matic (MATIC) was up 1.6% while BNB coin (BNB) and XRP were up a nominal 2% in Asian evening hours on Saturday.

Sudden and steep market movement occurred Friday as regulators shut SVB amid a run on the bank. Traders sold their tokens holdings as USDC fell to as low as 87 cents early Saturday, spurring a sell-off.

Total crypto market capitalization fell under $920 billion for the first time since November, while over $200 million worth of crypto-tracked futures were liquidated in the past 24 hours.

Nearly $60 million in bitcoin futures were liquidated, the most among major cryptocurrencies, followed by $40 million in ether futures liquidations. Such liquidators likely contributed to the slide in bitcoin and ether.

Liquidation happens when a trader has insufficient funds to keep a leveraged trade open.

Meanwhile, some market analysts brushed off prolonged USDC fears by pointing to the token’s U.S. Treasury backing.

“80% of their assets are in the form of [6 million] US T-bills,” wrote one Crypto Twitter community member. “85% of these bills have been rolled over in the past 3 months. Interest rate risk is negative.”

Adam Cochran, partner at crypto fund CEHV, said the FIDC-insured nature of SVB suggested fears about the longevity of USDC were overblown.

“Good comparable for FDIC recovery process – the entity got 62% of balances paid out right away under the FDIC’s ‘advanced dividend’ process, and by final payment had recovered 94%,” Cochran said in a tweet. “If similar at [Silicon Valley Bank] then Circle’s maximum damage is [$198 million on $3.3 billion].”

Elsewhere, North Rock Digital co-founder Hal Press tweeted that 77% of Circle’s reserves were held in U.S. Treasury bills – citing official documents – meaning that the theoretical floor price of USDC was 77 cents.

“Circle holds 77% of their reserves in 1-4 month T-Bills. These T-Bills are held at BNY Mellon and managed by BlackRock. This provides an absolute floor on USDC of 0.77,” Press said.

DISCLOSURE

Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.

Trending1Money Cash Currency Bills (Pixabay)FinanceORBS Token Rises After DWF Labs Invests $10MMar 14, 20232CDCROP: Concept of leadership. Blocks with arrows moving up. (Getty Images)MarketsFirst Mover Americas: Bitcoin Hits 9-Month High Mar 14, 20233Polygon LabsWeb3Web3 Service Unstoppable Domains and Polygon Labs Roll Out .polygon DomainsMar 14, 20234Stop sign (Walter Knerr/Pixabay)FinanceU.K. Bank NatWest Limits Daily Crypto Payments to $1,200 Mar 14, 2023

Source coindesk.com

Related posts

Los futuros de dogecoin acumulan casi US$90M en liquidaciones durante un fin de semana inusual

Blake Goodwin

Bitcoin Loses Bullish Trendline as Fed Sees Restrictive Rates Needed for Some Time

Blake Goodwin

Ether Jumps to Nine-Month High Ahead of ‘Shapella’; Liquid Staking Tokens Jump

Blake Goodwin

Leave a Comment