After the silicon valley bank collapse (2nd largest in US history), USDC depegs to $0.87 due to the recent sell-off. $3.3 billion of the ~$40 billion of USDC reserves remain at SVB and Circle cannot find a way to get this money out.
Several centralized crypto exchanges blocked the USDC to USD conversion citing reasons that are not looking good for the holders. Just before the collapse, SVB's CEO Gregory W. Becker sold off $3.57m worth of $SIVB stock. Shady mfkn move, right?
As of today, I have converted all my USDC to MATIC & ETH. Soon I will move them to HBD if I feel the need to take profits in stablecoins. Lots of my friends are still confused because Tether had deposits in SVB too. So there is hardly any reliable stablecoin left for crypto users to book their profits and safeguard themselves from volatility.
For those who don't know, SVB was one of the preferred banks by tech startups in the valley for corp banking services. It was also preferred by VCs, Private Equity Firms, and high-net-worth individuals. All of them got fkd badly with SVB's bank run.
After failing to raise capital or find a buyer to clear out its dues, it collapsed. The major reason is the exits taken by tech startups that are collapsing themselves due to the recent meltdown in the tech industry. Cash crunch and high-interest rates killed their operations within 3 days.
Source: ettech.com
Relying on centralized cryptocurrencies in today's volatile market is the biggest risk you can take. No matter how big they are, there's a good chance they might not survive due to regulatory changes, crackdowns, and bank runs. It has been proven time and again. Becoming your bank has never been more important for the following reasons:
Cryptocurrency has made it possible for everyone to become their own bank yet many still rely on traditional banking and centralized exchanges for investment and transactions. 2022 was the year of awakening and looks like this awakening will continue until we see many more such collapses.
Options for reliable stablecoins is decreasing every day since UST Collapse. The world still needs a solid algorithmic stablecoin that can do its job well and sustain itself without the need for intermediaries. We already know that HBD is the perfect replacement for all the shit unstable coins out there.
Do you think the wider crypto community will catch up to it and find a new trusted decentralized gem? I belive we (hive community) have got some work to do. Please let me know your thoughts in the comment section below.
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