DAI Depegs to Lifetime Lows as Stablecoin Rout Plagues Crypto

mohammed-aasif-mansoori@newsletter.paragraph.com (Mohammed Aasif Mansoori) — Sun, 12 Mar 2023 17:24:05 GMT

As the market continues to digest the impact of the sudden collapse of tech-focused Silicon Valley Bank, days after Silvergate went into voluntary liquidation, algorithmic stablecoin DAI has been knocked off its peg and has hit an all-time low of 0.88 cents.

DAI is currently trading at $0.90 according to CoinGecko data.
DAI is an algorithmic stablecoin that is collateralized by holdings from MakerDAO which includes USDC. Traders are speculating that Circle, which issues USDC, has worse exposure to Silicon Valley Bank than the $3.3 of the $40 billion backing USDC it disclosed.
On-chain data from Dune shows that $563 million of DAI was burnt in the last 24 hours. In total, the stablecoin has a market cap of $4.9 billion.
Curve 3pool’s liquidity pool has also been hit as traders flee USDC. As of Saturday afternoon Hong Kong Time, the pool’s share of USDT has shrunk to less than 1.5%. Earlier this week it was split evenly between USDT, USDC, and DAI as is supposed to occur.
Meanwhile, Tron’s USDD has also been knocked off its peg and is down to $0.93. Tether remains pegged at $1.

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

mohammed-aasif-mansoori@newsletter.paragraph.com (Mohammed Aasif Mansoori) — Sun, 12 Mar 2023 17:17:55 GMT

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.