The stablecoin USDC has hit an all-time low, as investors are pulling out their funds. The decreasing demand for the cryptocurrency has led to a decline in its value, marking a setback for the digital asset industry. The latest development follows a recent crackdown by regulatory authorities on unregulated cryptocurrency exchanges and platforms in the US, which has raised concerns among investors about the reliability and stability of the sector. In the wake of the market volatility, experts warn against investing in volatile assets or cryptocurrencies that are subject to sudden fluctuations.
The collapse of Silicon Valley Bank on March 11 has caused a bearish wave for USDC. Circle, the stablecoin issuer, had $3.3 billion in deposits with the defunct bank, which led to uncertainty about USDC. As a result, the coin’s price fell below $0.90 for the first time, and investors are liquidating their USDC holdings for other assets. In contrast, rival stablecoin USDT has received significant inflows of volume. Circle assured USDC holders that their funds remain safe, but crypto firms such as Binance and Coinbase have limited their exposure to USDC. Maker DAO approved an emergency proposal to reduce USDC collateral. At present, USDC’s price has recovered slightly, and crypto market sentiment is mixed regarding its future.