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USDC in Panicked State, but Not Headed Towards Zero

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On March 11, DeFi researcher Ignas said in a message that USDC seemed to be in a state of panic but would not return to zero as UST did. Circle had clarified t…

USDC in Panicked State, but Not Headed Towards Zero

On March 11, DeFi researcher Ignas said in a message that USDC seemed to be in a state of panic but would not return to zero as UST did. Circle had clarified the amount of cash it held. Now only 8.2% (US $3.3 billion of US $40 billion) were trapped in Silicon Valley banks, but that did not mean that the money was gone. If the expected expenditure of the Federal Deposit Insurance Corporation of the United States was 94%, The loss of Circle may only be $198 million (the entity can immediately obtain 62% of the balance payment and recover 94% of the funds through the final payment under the “prepayment dividend” process of the Federal Deposit Insurance Corporation of the United States).

Viewpoint: USDC will not return to zero like UST, and Circle’s loss may only be 198 million dollars

Analysis based on this information:


DeFi researcher Ignas made a statement on March 11 regarding the state of USDC. According to his analysis, USDC appeared to be in a panicked state, but it wasn’t likely to reach zero like UST did. Ignas pointed out that Circle had provided clarity on the amount of cash it held, and only 8.2% or $3.3 billion of $40 billion stood trapped in Silicon Valley banks. However, he also highlighted that the money’s inaccessibility didn’t imply it was lost.

Ignas explained that if the expected expenditure of the Federal Deposit Insurance Corporation of the US was 94%, Circle’s loss could only amount to $198 million. He pointed out that Circle could immediately obtain 62% of the balance payment, and the Federal Deposit Insurance Corporation would finally return 94% of the funds through the “prepayment dividend” process.

The message seems to be addressing concerns about USDC’s financial stability and the ability of Circle to recover funds. By stating that USDC isn’t headed to zero like UST, Ignas tries to calm fears about the currency’s future. He makes an effort to demonstrate that Circle has a solid financial standing, with the majority of its funds unaffected by the Silicon Valley bank’s inaccessibility. Additionally, while the loss suffered may seem significant, it can be absorbed, given the Federal Deposit Insurance Corporation’s payment process.

Overall, Ignas’s message seems to suggest that Circle and USDC are financially stable, and the mode of recovery is in progress. With the payment process set by the Federal Deposit Insurance Corporation, it is only a matter of time before Circle recovers its funds. However, it remains to be seen how USDC holders will react, given these developments.

In conclusion, this message is significant for those who invest in or trade USDC. It provides a nuanced interpretation of the events surrounding Circle’s loss and its recovery process, which can help investors understand how the market may respond. The overall takeaway from the message is that USDC may be in a panicked state but is still viewed as a stable currency, and Circle is well-positioned to recover its funds.

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