Crypto wallets have withdrawn $902 million USDC from central exchanges in the last 24 hours amid the SVB and Silvergate shutdowns. The $11.4 billion USDC reserves are held in cash at Reserve Banks, which includes two members of the Federal Reserve System.
The SVB and Silvergate influence is spreading across the markets!
The shutdown of two federally insured members of the Federal Reserve System (Silicon Valley Bank -SVB- and Silvergate Bank) is causing ripple effects in the crypto ecosystem. Many are now looking at how these two events will affect Circle, the payments services company that operates the stablecoin USDC.
While banks that are somehow connected to crypto are shutting down, some in the crypto space are highlighting how a significant portion of their USDC reserves are stuck in cash at Reserve Banks. Deloitte’s Circle accounting report, released March 2, showed that Circle held cash at these banks as of January 2023: Bank of New York Mellon; Citizens Trust Bank; Customers Bank; New York Community Bank, Flagstar Bank, NA branch; Signature Bank; Silicon Valley Bank and Silvergate Bank.
According to Circle’s transparency page, $43.1 billion USDC is in circulation, with $43.2 billion in reserves; $11.4 billion, or 26% of all USDC reserves, is held in cash at Reserve Banks such as Silicon Valley and Silvergate. Circle has since moved some of its USDC reserve deposits from Silvergate and other banking partners, as noted in a company update on March 4. But Circle wasn’t the only one adapting to the shutdown of two members of the Federal Reserve System.
Circle’s stablecoin USDC withdraws from exchanges
USDC has been the token with the largest negative net flow from centralized exchanges among the three parties in the past 24 hours. All smart money wallets, all funds and market makers and all wallets have witnessed this flow, according to on-chain data from blockchain analytics firm Nansen. As a liquidity provider/miner at Uniswap, Nansen ‘smart money’ a wallet that meets at least one of several criteria, such as earning more than $100,000 through mechanisms called flash credits and making multiple profitable transactions in a single transaction on a decentralized exchange (DEX). accepts as.
In the last 24 hours, $68 million USDC has been outflowed from centralized exchanges from all smart wallets. Nansen-labeled funds and market maker addresses, which include Genesis Trading, Wintermute, and Jump Trading, attracted $79 million. All wallets witnessed a total outflow of approximately $902 million from centralized exchanges. In the past seven days, $3 billion in USDC has been withdrawn from central exchanges as of press time. Charles Stry, head of growth at crypto index platform Phuture, says in a dedicated Telegram message that “people are preparing for a worse-case scenario and moving towards more reliable (stable) assets.”
market tilting slightly more towards USDT > USDC over past 24hrs pic.twitter.com/S7yaO48ObU
— Will Sheehan (@wilburforce_) March 10, 2023
According to Nansen, the wallets with the highest USDC balances are owned by Binance, MakerDAO, Arbitrum, Polygon, Crypto.com, Voyager, Aave, Optimism, dYdX, and Compound, how much their crypto assets depend on USDC to hold value. shows that.
Top USDC balances / Source: Nansen
