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03/17/2023
Stablecoin Imbalance: USDC Sales Cause Tether Trading Madness

Stablecoin Imbalance: USDC Sales Cause Tether Trading Madness

The on-chain data reveals that trading firms were quick to capitalize on the USDC stablecoin's temporary repeg. While this strategy comes with risks, it shows that high-frequency traders are always on the lookout for arbitrage opportunities that can yield significant profits

Over the weekend, trading firms quickly jumped on the USDC long trade as the stablecoin's value fell to $0.88 amid concerns about the US banking system. USDC is a stablecoin that is supposed to be pegged 1:1 to the US dollar. Panic spread through the crypto market on Saturday as Circle, the company that issues USDC, revealed that it had $3.3 billion in exposure to Silicon Valley Bank (SVB), which was shuttered by regulators the day before.

The concerns prompted a wave of USDC sales across the decentralized finance (DeFi) ecosystem. This caused an imbalance in a stablecoin pool on the decentralized exchange Curve, which comprises three equally weighted stablecoins. The supply of USDC skewed, and traders began to withdraw stablecoins from centralized exchanges and swap tether (USDT) for USDC on decentralized exchanges.

The situation provided an arbitrage opportunity for trading firms, especially those who use high-frequency trading. One wallet, in particular, received $215 million of tether from Binance before executing 59 transactions that involved swapping USDT for USDC and the DAI stablecoin. According to research from CryptoQuant, the wallet made a profit of around $16.5 million.

The reason why the opportunity was so attractive was that tether retained its dollar peg, whereas USDC had deviated from its peg. As a result, trading tether for USDC when it traded below 90 cents presented a significant arbitrage opportunity. Despite the risks involved in the strategy, the resilience of USDC in what appeared to be a desperate situation demonstrates the risk-taking approach of crypto traders. The fact that USDC was able to recover relatively quickly from this incident is a testament to its usefulness as a stablecoin, as well as the faith that traders have in it.

Tether, the largest stablecoin by market cap, has faced several deviations from its peg over the years, yet it remains a critical part of the crypto ecosystem despite regulatory scrutiny. This highlights the importance of stablecoins in the crypto market, as they enable traders to move funds quickly and easily without having to rely on traditional banking channels.

The materials found on the Cryptonica.com website shall not be taken as individual investment recommendations. The financial instruments or operations mentioned therein may not align with your investment profile or objectives. We assume no responsibility for any missing facts or inaccurate information in the texts. Cryptocurrencies are financial assets with high risk and volatility. Therefore, it is crucial that you conduct your own research on financial instruments and make independent decisions. Before engaging in any actions related to cryptocurrency, you shall study, understand, and comply with the laws applicable in your region and country.

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03/27/2023
First Citizens BancShares Buys Failed Silicon Valley Bank

First Citizens BancShares Buys Failed Silicon Valley Bank

First Citizens BancShares, the 30th largest commercial bank in the United States based in North Carolina, has agreed to acquire the assets of Silicon Valley Bank (SVB), a California lender whose sudden collapse earlier this month sent shock waves across the financial sector

03/24/2023
Arbitrum's Highly-Anticipated Airdrop: The Wild Ride of ARB Token

Arbitrum's Highly-Anticipated Airdrop: The Wild Ride of ARB Token

Arbitrum's highly anticipated token airdrop has finally gone live, but not without causing a stir in the cryptocurrency market. The landing page for the project briefly crashed as the project opened the gates to its ARB token, along with Arbiscan, causing frustration for users. In the first 30 minutes following the opening of the claiming window, the blockchain explorer saw a record number of over 84,000 visitors

03/23/2023
Bitcoin's Wild Ride: Highs and Lows as Fed Signals Tightening

Bitcoin's Wild Ride: Highs and Lows as Fed Signals Tightening

Bitcoin's surge earlier this week was short-lived as it dipped to slightly above $27,000 on Wednesday afternoon following the Federal Reserve's announcement of a quarter-point rate hike

03/21/2023
Coinbase Tests ChatGPT. Will AI Change Crypto Industry?

Coinbase Tests ChatGPT. Will AI Change Crypto Industry?

Coinbase, one of the largest cryptocurrency exchanges in the world, has conducted a test using the artificial intelligence (AI) application, ChatGPT, to assess the security risks of smart contracts. The San Francisco-based exchange tested the AI tool's accuracy by using its ERC-20 token review framework, publishing the results in a blog post on March 20

03/20/2023
Arbitrum Launches ARB Token and Boost Decentralization

Arbitrum Launches ARB Token and Boost Decentralization

Arbitrum, a major player in Ethereum's layer 2 scaling arena, has announced the introduction of a new token called ARB. The Arbitrum Foundation stated on Thursday that the token will be distributed to community members on March 23rd via airdrop

03/17/2023
The Ethereum Shanghai Upgrade is Coming. What Will Happen to ETH Price?

The Ethereum Shanghai Upgrade is Coming. What Will Happen to ETH Price?

The Ethereum Shanghai upgrade, also known as Shapella, is set to go live on April 12, according to a recent announcement by the network's developers. The upgrade includes Ethereum Improvement Proposal (EIP) 4895, which will allow users to withdraw their staked Ether from the Beacon Chain, increasing market liquidity and making it easier for users to access their funds along with three additional improvements aimed at optimizing gas costs for specific activities

03/14/2023
Huobi Now Has a $100 000 000 Liquidity Fund: What Does It Mean?

Huobi Now Has a $100 000 000 Liquidity Fund: What Does It Mean?

Not so long ago, Huobi launched a 20 000 BTC investor protection fund to help users out in case of force majeure. As if that wasn’t cool enough, now there’s a $100 000 000 liquidity pool to protect the token from dropping. Cuteness overload!

03/13/2023
SVB Crash: USDC is Back!

SVB Crash: USDC is Back!

Thanks to machinations by the one who shall not be named, USDC’s price has recently dropped to an all-time low of 88% thanks to SVB’s fail. But it’s back!

03/12/2023
Attack On Titan’s 4th and final season is in full swing. Will AoT NFTs be the next big thing?

Attack On Titan’s 4th and final season is in full swing. Will AoT NFTs be the next big thing?

Attack On Titan is a Japanese manga series written by Hajime Isayama. Since its debut in 2009, the series has become a global phenomenon, with a dedicated fan base worldwide

03/10/2023
CryptoGPT's GPT Token Takes Off. Will it Fuel Decentralized AI?

CryptoGPT's GPT Token Takes Off. Will it Fuel Decentralized AI?

Today marks a significant milestone for CryptoGPT as its native GPT token has been listed on major cryptocurrency exchanges such as Bitfinex, PancakeSwap, Bybit, Gate, Uniswap, MEXC, and Bitget

HowTo

How to Mine Polkadot?

How to Mine Polkadot?

Polkadot is a blockchain platform that was created by Gavin Wood, one of the co-founders of Ethereum, and launched in May 2020. The project uses a multi-chain architecture, where multiple parallel blockchains (known as "parachains") can operate simultaneously and communicate with each other

What is Cold Storage?

What is Cold Storage?

In the world of cryptocurrency, security is of utmost importance. With the popularity of cryptocurrencies, hacks, and security breaches come along. Cold storage of digital assets has emerged as an increasingly popular option for those seeking increased protection. This article will examine the advantages and disadvantages of cold storage and show you how to select the optimal solution for your needs

Analytics

Bitcoin NFTs: Why it's a Hot Topic

Bitcoin NFTs: Why it's a Hot Topic

We explain how to create Bitcoin NFTs, why they became popular and how they work

Arbitrum: How the L2 network is changing the DeFi game with an ARB listing

Arbitrum: How the L2 network is changing the DeFi game with an ARB listing

Arbitrum is a new Level 2 network platform that is already starting to turn the DeFi world upside down. With the ability to process transactions faster and cheaper, Arbitrum is already attracting the attention of many investors and users