Analysis: USDC will not drop to zero like UST, and Circle's loss may only be 198 million dollars

ChainCatcher news, DeFi researcher Ignas tweeted that USDC seems to be in a state of panic but will not go to zero like UST. Circle has clarified the amount of cash it holds, with only 8.2% ($3.3 billion out of $40 billion) trapped in Silicon Valley Bank, but this does not mean the money is gone. According to the expected payout of 94% by the Federal Deposit Insurance Corporation, Circle's loss may only be $198 million (entities can immediately receive 62% of the balance under the FDIC's "prepaid dividend" process and can recover 94% of funds through final payments).

Additionally, over 75% of Circle's assets belong to a short-term U.S. Treasury portfolio with maturities of 3 years or less, which means the missing gap will be filled by interest payments within a few months.

When discussing the USDC de-pegging issue, Ignas mainly pointed to three reasons:

1. Coinbase halted USDC-USD redemptions because banks are closed on weekends;
2. USDC was liquidated on low liquidity spot exchanges (due to the widening sell-off);
3. Binance closed BUSD-USDC conversions. When banks open for business next week, USDC's 1:1 redemptions will continue, and the dollar peg will be restored. (Source link)