The crypto market has gone haywire following the closure of Silicon Valley Bank (SVB) on Friday, media reports said. USDC, the second largest stablecoin with about $42 billion outstanding, has about $3.3 billion of its cash reserves stuck in SVB. The stablecoin has seen over $1 billion of withdrawals since the closure of SVB, making it even lose its peg to the dollar.
SVB with about $200 billion of assets including deposits saw its stocks fall by up to 60% from Thursday to Friday and a massive run on deposits. The bank tried to shore up its capital by trying to raise new funds and selling all available-for-sale securities but these measures could not add up to much.
The failure of SVB comes close on the heels of a similar collapse of crypto-focused Silvergate Bank last week.
Finally, California banking regulators on Friday closed SVB and appointed Federal Deposit Insurance Corporation (FDIC) as the receiver in a move to protect the depositors.
Over the 7 days, Bitcoin and most altcoins are in red, with USDC declining 7.01% at $0.926 on CryptoMarketCap.com at 6.27 GMT. The total market cap of the cryptocurrency industry has fallen to below $1 trillion. BTC lost 8.38% to $20,500 levels over the 7 days. Its market cap fell below $400 million.
The only coin in the Top 10 list that maintained green over the 7 days is Tether (USDT), which has announced that it has got no exposure to SVB. Binance, too, has announced that it has no exposure to the collapse of SVB.
Both Binance and Coinbase have paused the conversion of USDC into USD and BUSD, given extreme activity involving USDC.
