The USDC stablecoin saw a temporary drop to $0.74 versus its usual $1 peg on Binance today, over three rapid instances amid a widespread market sell-off. This was partly influenced by doubts over the approval of a Bitcoin ETF. The declines occurred between 12:10 and 12:21 UTC, and each time quickly returned to $1. This phenomenon is related to trade imbalance and insufficient liquidity when trading large amounts of USDC against USDT. This is not the first minor decoupling incident for the US dollar, indicating its susceptibility to market pressures despite its overall stability.
It is also worth noting the unbalanced market depth for USDC/USDT Pair trading, especially on the Binance exchange. It indicates that the speculative news led to the liquidation of more than $500 million in financial derivatives positions.
Currently, the coin is trading near its pegged value, at around $0.999, reflecting an almost complete recovery and underscoring its resilience in the face of market volatility. This return to near parity with the US dollar is a testament to the mechanisms in place to maintain its stability, despite occasional disruptions in the cryptocurrency market.
What is the US Dollar (USDC) currency?
USDC (USD Coin) is a stablecoin pegged to the US dollar 1:1, backed by a mix of cash and short-term US Treasuries. Launched in September 2018 by Circle and Coinbase, it aims to enable digital financial transactions in a cashless era. USDC is transparent and regulatory compliant, ensuring every token is backed by real dollars. Its use has grown, especially in decentralized finance. The security of the coin is enhanced by Ethereum's blockchain technology. As for price predictions, they are difficult to predict since they are designed to maintain a constant value close to $1.
