Where does Vitalik Buterin’s allegiance lie: RAI or Circle’s stablecoin USDC?

  • Vitalik Buterin’s wallet addresses converted 20,040 RAI to 56,746 USDC earlier today. 
  • Buterin has previously shared his optimism on Reflexer’s algorithmic stablecoin that is backed by Ethereum. 
  • It is uncertain whether Buterin’s move can be interpreted as support for Circle’s stablecoin USDC

Ethereum co-founder Vitalik Buterin recently converted his holdings of algorithmic stablecoin Reflexer (RAI) into Circle’s stablecoin USDC. It is uncertain whether this is support for the stablecoin during its crisis or a strategic move. 

Also read: Can Bitcoin accumulation by sharks and whales catalyse BTC price recovery?

Why did Circle’s stablecoin USDC depeg?

Circle’s US Dollar pegged stablecoin USDC is currently battling a crisis. USDC lost its $1 parity and nosedived to $0.90. The stablecoin hit an all-time low of $0.87 earlier today. The collapse of the Silicon Valley Bank and Circle’s exposure to the institution triggered the depeg and the subsequent price drop. 

Several other stablecoins like FRAX, DAI, USDP and TUSD have suffered a decline in price amidst rising uncertainty in the crypto ecosystem. It is likely that crypto market participants are turning to stablecoins like RAI and LUSD, with limited to no exposure to Circle and its stablecoin USDC

Find out more here: Will Circle’s stablecoin suffer same fate as UST: Binance and Coinbase react to USDC depeg

Vitalik Buterin converts RAI to USDC: Show of support or something else

Ethereum co-founder Buterin converted 20,040 Reflexer tokens to 56,746 USDC on Saturday. The Etherscan transaction is shown below:

RAI converted to USDC

RAI converted to USDC

Reflexer’s algorithmic stablecoin has previously garnered positive commentary from the Ethereum co-founder. Buterin has shared his optimism about RAI in the past. Buterin’s latest move is currently open to interpretation and it is uncertain whether the ETH co-founder is supporting USDC in its crisis or just shedding his RAI holdings. 

Until June 2020, Circle’s stablecoin USDC was exclusive to the Ethereum blockchain. In June 2020, Centre, the collaboration between Circle and Coinbase announced a framework for multi-chain support for USDC. It is likely that Buterin is extending support to USDC, converting his algorithmic stablecoin holdings into Circle’s stablecoin. 

Where does Ethereum stand when trouble is brewing in DeFi?

Circle’s USDC is one of the important elements of the DeFi ecosystem. So are the other stablecoins that are currently suffering a depeg. Amidst wider crypto market uncertainty, the DeFi ecosystem is hit by the declining total volume locked on networks like Ethereum. 

Analysts at Citron Research, a stock commentary firm believe Ethereum is at risk of a decline to $350. The technical experts argue the case that Ethereum is a security and the New York State Attorney General is set to “end the charade.”

Attorney General Letitia James recently filed a suit against KuCoin, alleging that the exchange is violating securities laws, arguing “Ethereum is a security.” When the AG focuses on the Ethereum Network, analysts expect that James could uncover self-dealing, ICO transactions, multiple attempts to avoid federal laws of taxation and securities, all while being controlled by a small group of people. 

Experts believe switching from Proof-of-Work to Proof-of-Stake turned Ethereum into a security and made it an investment vehicle, not just a smart contract network. Experts have drawn parallels between Vitalik’s altruism and defunct FTX exchange founder Samuel Bankman-Fried’s charity efforts. 

Citron Researchers believe $175 billion in market capitalization puts Ethereum at the same level as Open AI, Twitter (TWTR), Chipotle Mexican Sausage (CMG) and Lululemon Athletica Inc (LULU) combined. Citron’s take on Ethereum has garnered mass criticism on Twitter, however it remains to be seen where ETH is headed next with Circle’s fast spreading contagion. 

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.

Join Telegram

Recommended content

Recommended Content

Editors’ Picks

MANTA suffers 4% pullback after unlocking tokens worth $40 million

MANTA suffers 4% pullback after unlocking tokens worth $40 million

Manta Network (MANTA) unlocked over 8% of its circulating supply on Thursday. The unlocked tokens were airdropped and distributed in public sale, according to data from Tokenunlocks. 

More Cryptocurrencies News

XRP struggles to recover as lingering Ripple lawsuit could reach Supreme Court, former SEC litigator says

XRP struggles to recover as lingering Ripple lawsuit could reach Supreme Court, former SEC litigator says

The SEC vs. Ripple potential showdown at the Supreme Court is likely, says former SEC litigator Ladan Stewart. XRP Ledger calls developers, businesses and investors to build on the blockchain, extending Apex 2024 registration until April 30. 

More Ripple News

Bitcoin Layer 2 Merlin chain TVL climbs 20%, defying broad market correction

Bitcoin Layer 2 Merlin chain TVL climbs 20%, defying broad market correction

Merlin chain’s TVL added 20% this week, and crossed $800 million on Thursday. Bitcoin Layer 2 assets noted double-digit losses in the past week. Stacks, Elastos, SatoshiVM, BVM are hit by a correction as Bitcoin hovers around $61,000. 

More Bitcoin News

If Bitcoin restarts bull run, these altcoins are likely to explode Premium

If Bitcoin restarts bull run, these altcoins are likely to explode

If Bitcoin’s consolidation ends and the bull run resumes, altcoins are likely going to trigger a massive rally. Last cycle’s hot tokens like SOL, AVAX, WIF, ONDO, etc., could see renewed enthusiasm. 

More Cryptocurrencies News

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin (BTC) price has been hovering around the $70,000 psychological level for a few weeks, resulting in a rangebound movement. This development could lead to a massive liquidation on either side before a directional move is established. 

Read full analysis