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USDC/USDT Stablecoin Pair Experiences Brief Dip In Value Amidst Market Turbulence

In a recent bout of market turmoil, the trading pair involving Circle’s USDC dollar and Tether’s USDT on Binance witnessed a sudden drop to $0.76 and $0.8 at UTC+8 20:00 and 20:15, respectively.

Shortly thereafter, the values swiftly normalized. A similar dip was observed on OKX, with the trading pair reaching $0.955 around 20:00.

This incident marks a notable departure from the stability typically associated with stablecoins. The last instance of USDC deviating from its peg occurred in March, where it hit a low of $0.87, triggering cascading depegs in other stablecoins like $DAI and $FRAX.

The recent depegging event followed an announcement by @Circle, confirming holdings of $3.3 billion in USDC reserves with the now-collapsing Silicon Valley Bank. While Circle did not incur any losses, the incident impacted USDC’s market share significantly.

Circle Responds With Strategic Measures To Solve The Issue

In response, Circle implemented strategic measures to address the situation, extending the use of USDC across various blockchain networks such as Polkadot, Polygon, Solana, Near, Optimism, Base, and others. Furthermore, Circle underwent a reorganization, shutting down the Centre Consortium, a collaborative venture with @Coinbase responsible for USDC governance. Post-restructuring, Circle took on the issuance and governance of USDC internally.

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The stablecoin landscape also witnessed shifts in market share dynamics. Throughout 2023, the market share of $USDT surged from 48% to an impressive 70%. Tether benefited from a narrative shift that portrayed US regulators negatively, prompting users to favor stablecoins based outside the US.

This growing market share and favorable interest rates translated into financial success for @Tether_to, reporting a substantial $1.48 billion in net profit in Q1 2023 and over $1 billion in operating profit in Q2 2023. The broader stablecoin ecosystem continues to evolve, navigating challenges while adapting to changing market conditions.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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Image Source: aleksandrasova/123RF // Image Effects by Colorcinch

Will Izuchukwu

Will is a News/Content Writer and SEO Expert with years of active experience. He has a good history of writing credible articles and trending topics ranging from News Articles to Constructive Writings all around the Cryptocurrency and Blockchain Industry.

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