• CEO Jeremy Allaire confirms that Circle has been "able to access" its $3.3 billion of funds held with the collapsed Silicon Valley Bank.
  • The temporarily locked funds significantly affected USDC, causing it to lose market share in favor of rival USDT.
  • The stablecoin's dollar peg has since recovered, but mass redemptions of USDC have resulted in the market cap of the stablecoin dropping.

Circle CEO and co-founder Jeremy Allaire has revealed being able to access the $3.3 billion held at collapsed Silicon Valley Bank (SVB). In a video with Bloomberg Markets on March 14, the stablecoin issuer's executive said that he believed that "if not everything, very close to everything, was able to clear" from the collapsed lender on March 13.

Circle's USDC depeg on SVB woes

Following the news that SVB had collapsed with $3.3 billion of Circle's cash trapped, the company's stablecoin USD Coin (USDC) briefly de-pegged from the dollar. Consequently, cryptocurrency whales registered severe losses and embarked on a series of capital flights to protect their remaining assets.

In a Twitter post, crypto exchange Huobi Global's co-founder Du Jun said

[I] dodged LUNA, dodged 3AC, even dodged FTX [and their collapse], but I couldn't avoid Silvergate, nor SVB and USDC. Asked a few crypto veterans; losses amounted to >$1 billion in stock and deposits, myself included. I'm very upset, and it's time to cut down on my budget.

However, the stablecoin has restored its dollar peg, although mass redemptions have caused a significant drop in USDC's market capitalization. Based on CoinMarketCap data, the USDC market cap is down almost 10% since March 11 and around 3% in the last 24 hours to $38.39 billion.

USDC market cap

Tether market cap soars as network mints $2 billion USDT

Meanwhile, USDC industry rival Tether (USDT) has recorded a notable increase in market cap in the last 24 hourse, recording a 1% gain to $73.03 billion. This comes after the network minted $2 billion USDT tokens anticipating future demand.

The minting took place on Ethereum and TRON blockchains on March 15, catapulting Tether’s market cap 3.5% from $72.1 billion to $74.6 billion between March 12 and March 14. The network’s market capitalization leaped $7 billion since the onset of 2023, rising from $66 billion.

Tether’s CTO Paolo Ardoino has clariefied the purpose for minting, saying the amount would serve as “inventory for next period issuance requests and chain swaps.”

USDT marketcap

Based on the above representations, USDC was affected by the brief lock-up of funds at SVB. According to the January reserve report released on March 2, the $3.3 billion was barely 8% of the stablecoin's reserves. Nevertheless, the situation cost USDC its market share to an industry competitor.

The report assured that USDC was 100% collateralized, with more than 80% of the reserve comprising short-dated US Treasury Bills.

Because of the recent catastrophes in the crypto and financial playing fields, highly liquid assets with direct obligations of the US government have passed as the safest investments worldwide.

 

 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Bitcoin consolidates ahead of MicroStrategy Q1 earnings, strategic Bitcoin reserve deadline

Bitcoin consolidates ahead of MicroStrategy Q1 earnings, strategic Bitcoin reserve deadline

Bitcoin price is extending its consolidation streak, trading around $95,000 on Wednesday, as traders await a decisive breakout. MicroStrategy’s Q1 earnings release and the approaching deadline for the Strategic Bitcoin Reserve have the potential to move BTC price.

Chainlink price offers mixed signals as supply outside of exchanges soars but network activity declines

Chainlink price offers mixed signals as supply outside of exchanges soars but network activity declines

Chainlink's supply outside exchanges has surged to 803.38 million from 778.87 million in under two months. LINK network activity declines, with new and active addresses falling from a recent peak.

Ripple Price Prediction: XRP price uptrend toward $3 looks steady

Ripple Price Prediction: XRP price uptrend toward $3 looks steady

Ripple (XRP) price hovers at $2.24 at the time of writing on Wednesday as bulls try to prevent the pullback from its April peak of $2.36 from extending further. If XRP holds above the immediate support at $2.21, a reversal could soon ensue.

THORChain announces integration of XRP stagenet ahead of the mainnet network launch

THORChain announces integration of XRP stagenet ahead of the mainnet network launch

THORChain announced on Tuesday that its stagenet development of its Ripple (XRP) integration is nearing the final step, with mainnet activation imminent. This integration enhances THORChain’s economic model by increasing swap activity and protocol fees. 

Bitcoin Weekly Forecast: BTC consolidates after posting over 10% weekly surge 

Bitcoin Weekly Forecast: BTC consolidates after posting over 10% weekly surge 

Bitcoin price is consolidating around $94,000 at the time of writing on Friday, holding onto the recent 10% increase seen earlier this week. This week’s rally was supported by strong institutional demand, as US spot ETFs recorded a total inflow of $2.68 billion until Thursday. 

Read full analysis
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

BTC

ETH

XRP