USDC Pegs Back to $1, Bitcoin Surges to $24,400

After 72 hours of chaos, the second-largest stablecoin in the crypto industry, USDC, has finally returned to its $1 peg. Meanwhile, Bitcoin continues its impressive recovery.

USDC Repegs

On the evening of March 13, USDC climbed back to its $1 value, stabilizing after an unprecedented period of turmoil.

Earlier, following the collapse of Silicon Valley Bank on the evening of March 10, USDC issuer Circle revealed that $3.3 billion in cash backing the stablecoin was stuck at the bank, accounting for 8% of USDC’s total collateral.

This news triggered a market panic, causing USDC to plummet to as low as $0.87 on March 11—its most severe depeg since its inception in 2018.

By March 12, Circle assured that it would take all necessary measures to cover the shortfall, including utilizing company assets or even raising additional funds. USDC's price recovered to $0.96 during this period.

In the early hours of March 13, the U.S. government intervened to prevent a broader bank run and committed to fully reimbursing depositors at Silicon Valley Bank, including Circle. This intervention led to a strong market recovery, with BTC reaching $22,600.

By the evening, as U.S. financial markets opened, despite significant sell-offs in bank stocks, USDC successfully managed large withdrawal transactions and returned to its $1 peg.

USDC Price Movements in the Past 7 Days, Screenshot from CoinGecko at 09:35 PM on March 13, 2023

However, Circle has not yet provided an official update on whether it has retrieved the $3.3 billion from Silicon Valley Bank.

Bitcoin Rises 18% in 24 Hours

Driven by speculation that the Fed might reconsider interest rate adjustments at the end of March, Bitcoin has surged dramatically in the past 24 hours, climbing nearly 18% to $24,444—its highest level since February 23.

On March 13 alone, BTC has recovered nearly $4,000 in value.

1H Chart of BTC/USDT on Binance at 10:10 PM on March 13, 2023

Additionally, the severe sell-off in U.S. bank stocks and trading halts on the stock exchange have led investors to consider alternative assets like cryptocurrencies and gold.

Ethereum has also seen a near 16% rebound to $1,692, while other major altcoins have increased by 3-12%.

1H Chart of ETH/USDT on Binance at 10:10 PM on March 13, 2023

In the past 24 hours, liquidations in the derivatives market reached $307 million, with short positions accounting for 82%.

Cryptocurrency Liquidations in the Past 12 Hours, Data from Coinglass at 09:55 PM on March 13, 2023