USD Coin (USDC) fell under 90 cents on Saturday amid little respite for the token’s recovery as traders likely fled to other stablecoins to protect capital.
USDC traded at 87 cents in Asian morning hours, reaching lifetime lows. It has since rebounded to just over 90 cents as of Asian evening hours.
Some traders bet on a gradual recovery to the $1 mark, buying the relatively cheap USDC for a potentially guaranteed 10% should the tokens repeg to the intended dollar mark.
Leverage could potentially magnify returns for traders betting on a recovery. As such, futures funding rates on the crypto exchange Bybit jumped to as much as 0.3% on Saturday morning.
That means traders made as much as 0.3% in fees from their total market position. The funding was paid by traders who shorted USDC, paying over 0.4% to borrow the asset and bet on lower prices.
Some $4 million in USDC futures were liquidated in the past 24 hours, Coinglass data shows.
Elsewhere, Maker’s decentralized stablecoin dai (DAI) also depegged from its intended $1 mark on Saturday amid market stress, CoinDesk reported. It hit an all-time low of 88 cents.
Friday’s collapse of Silicon Valley Bank (SVB) caused a market-wide drop for cryptocurrencies in the past 24 hours as traders found some of the industry’s major players had exposure to the bank.
These players included U.S.-based stablecoin issuer Circle held a part of its USDC stablecoin’s cash reserves at Silicon Valley Bank as of Jan. 17, according to the firm's latest attestation.
A Circle spokesperson said late Friday that SBV was one of the six banks that the firm used "for managing the approximately 25% portion of USDC reserves held in cash."