What happened to USDC and the price of cryptocurrencies?

We explain what happened in the last hours with this cryptocurrency! Over the weekend, the USD Coin (USDC) stablecoin, one of the most widely used in Latin America and the rest of the world, lost its 1:1 parity with the US dollar and on Saturday plummeted to a record low of USD 0. .87. This after Circle, the US company in charge of issuing it, confirmed that some of the reserves that back it were deposited in Silicon Valley Bank, a bank whose license was frozen by US regulators on March 10, due to its lack of of liquidity.

As a side effect, DAI and other stablecoins on the market moved away from their dollar peg amid widespread fears.

What happens now with the USDC price?

In the last few hours, the USDC stablecoin has been recovering its parity with the dollar thanks to two factors: The confirmation of its CEO, Jeremy Allaire, that the reserves are safe and the funds are protected, and the bank rescue programs that he announced the US Federal Reserve.

According to data from CoinMarketCap, USDC is up 3.3% in the last 24 hours to settle at $0.99.

“The market has progressively stabilized after the US authorities announced plans to mitigate the consequences of the insolvency of Silicon Valley Bank, allowing the stablecoin USD Coin to return to a 1:1 ratio against the dollar.”, explains Rafael Meruane, co-founder of CryptoMarket.

What happened to BUSD and the price of cryptocurrencies?

What happened to the price of Bitcoin?

As is often the case in financial markets, the effects of USDC’s parity loss also spilled over into the price of cryptocurrencies such as Bitcoin.

The price of Bitcoin (BTC), Ethereum (ETH) and several others started the week higher. The market rose 7% in the last few hours, as the Federal Reserve (FED) injected liquidity into the United States economy. In the same vein, the trading volume of Bitcoin shot up by almost 100%, according to data from Coinmarketcap.

It remains to be seen what happens in the markets in the coming days. “It is important to note that Bitcoin price projections are highly variable and subject to various factors. As part of cyclical behavior, cryptocurrencies could hit all-time highs and also experience dips. If we look back, since its inception, Bitcoin has had at least five bearish cycles from which it has later recovered.notes Meruane.