71–80 of 204 posts
I’m not very knowledgeable on this topic, so I have a legit question about all of this: How is pausing withdrawals not blatant currency manipulation? If I had USDC and lost all faith in it yesterday, shouldn’t I be allowed to cash out today? Also, if they’ve got many billions in cash, why would losing access to a sliver of it justify shutting down withdrawals? “Trust us, it’s worth a dollar! Or don’t trust us! It doe…
I don't get it..the money is gone. Is there something I am missing here? You cannot just magically fix a shortfall.
23% of the reserve, or $9.7B is held in cash. I think on Thursday, SVB saw cash outflow requests over $40b in one day. USDC peg is so far below 1 right now there will definitely be a lot of par arbitrage Monday trying to withdraw. Hopefully it doesn’t take longer than a day for them to settle treasury trades, and maybe some people have lost the keys to their crypto. They could also possibly have a line of credit with…
Can one short USDC with leverage?
It's a terrible trade to make now though.
Earlier quoted context omitted.
Terra was collateralized by crypto. USDT is collateralized by… something, maybe. Given that USDT always regained its peg regardless, the depeg of USDC seems like an overreaction.
USDT always regained its peg until one day it doesn't
23% of the reserve, or $9.7B is held in cash. I think on Thursday, SVB saw cash outflow requests over $40b in one day. USDC peg is so far below 1 right now there will definitely be a lot of par arbitrage Monday trying to withdraw. Hopefully it doesn’t take longer than a day for them to settle treasury trades, and maybe some people have lost the keys to their crypto. They could also possibly have a line of credit with…
Can one short USDC with leverage?
23% of the reserve, or $9.7B is held in cash. I think on Thursday, SVB saw cash outflow requests over $40b in one day. USDC peg is so far below 1 right now there will definitely be a lot of par arbitrage Monday trying to withdraw. Hopefully it doesn’t take longer than a day for them to settle treasury trades, and maybe some people have lost the keys to their crypto. They could also possibly have a line of credit with…
The problem at Silvergate and Silicon Valley Banks is that they bought 10 year or 30 year bonds, not 3 month bills. Its a completely different composition, with completely different properties.
Earlier quoted context omitted.
USDT always regained its peg until one day it doesn't
Terra regained it's peg until it didn't.
What they don't bring up. The peg is a lie, hit $0.87. https://www.cnbc.com/2023/03/11/stablecoin-usdc-breaks-dolla...
The peg is held up by the belief that you can always get 1 USD for 1 USDC. Obviously the market had some doubts about this today and then liquidity issues drove the price down. I'm somewhat surprised that it climbed back up this fast which means that the panic seems to be over (for the moment).
Or maybe what we're talking about is a broken peg. Circle was willing to pay $1 USD for a USDC, but they're no longer willing to pay that (at least temporarily). Maybe countries have seen their pegs broken because they couldn't actually defend their peg. They'd promise "we'll give you $1 USD for every 2 PegCurrency" and then someone would come along with a ton of PegCurrency and ask for dollars and they wouldn't have enough dollars to give them. A peg only lasts as long as you have the currency to keep paying at that rate.
We'll have to see on Monday and Tuesday whether they will go back to defending their peg. Unlike many foreign currency pegs, they should have the cash to defend their peg to the last dollar (with the exception of losses incurred due to SVB going under). However, it still might mean a huge loss of confidence in USDC. If they're unable to offer liquidity when people want it, that's potentially a big problem for the product they're offering (but it also might not be: maybe people don't care about 24/7 liquidity and are ok with waiting several days for liquidity).