Banking Crisis and Why Crypto Markets Should Care (Part 2)
In the previous part, we discussed the banking crisis and the potential of crypto markets. This part will explore stablecoins' stability during the crisis and the Bitget Innovation Zone for low-risk, exclusive projects.
Banking Crisis and Why Crypto Markets Should Care (Part 1) can be found here.
Stablecoins have been hailed as the crucial link between the world of cryptocurrencies and traditional fiat currencies. Functioning as native digital dollars, these currencies aim to maintain a one-to-one value with the US dollar at all times, providing a stable and reliable means of exchange for users. In fact, most trading on cryptocurrency exchanges involves stablecoins, as opposed to direct exchanges between fiat and digital currencies.
The rollercoaster ride of stablecoins’ quest for stability
However, the reliability of stablecoins has come under question in recent times. Instances such as the collapse of Terra, the high volatility of GUSD, and the recent loss of the dollar peg by USD Coin (USDC), have cast doubts on their stability. Such occurrences raise concerns regarding the ability of stablecoins to function effectively as a reliable means of exchange.
Following Circle's acknowledgment of a substantial US$3.3 billion cash reserve with Silicon Valley Bank, the value of its USDC stablecoin experienced a momentary downturn, dropping to 88 cents from its typical one-dollar valuation. The decrease in the value of USDC negatively impacted the worth of the crypto assets held by numerous individuals, leading to the sale of various trading positions across the crypto market. USDC, which ranks second among stablecoins and serves as a prominent trading currency in decentralized finance, witnessed a notable disruption in its market position due to this disclosure.
The USDC depeg fear caused panic selling, and Binance and Coinbase both confirmed they would temporarily suspend USDC conversions. However, investors can take advantage of the situation by trading USDCUSDT on Bitget USDT-Ⓜ️ Futures. Bitget offers 24/7 global and multilingual customer support; we are always there for our dedicated users.
On March 12th, the CEO of Circle, Jeremy Allaire, had high praise for the US government and Federal Reserve's swift action to implement a US$25 billion funding program to support liquidity-troubled banks like Silicon Valley Bank. This move was welcomed by many, including the Federal Deposit Insurance Corporation, who assured depositors of Silicon Valley Bank that they would have access to all of their money starting on Monday.
The impact of this announcement was immediately felt, as the market experienced a significant pump in asset prices across the board. The total crypto market cap is now above US$1 trillion, a significant increase from the sharp drop to US$961 billion on March 11th. Additionally, USDC bounced back toward its US$1 peg.
However, the recent depegging of USDC served as a reminder that it, like any other currency, is not immune to counterparty risk. This begs the question: "How can we ensure the stability of stablecoins?"
As we navigate the rapidly evolving financial landscape, it's important to keep in mind that every financial instrument comes with some level of risk. While the US government and Federal Reserve have taken steps to mitigate the impact of counterparty risk, it's essential to do your due diligence before investing in any asset. The market's recent reaction to these announcements underscores the need for investors to remain vigilant and informed about the risks and opportunities in the financial sector.
Breaking the fear barrier: Discover new projects safely with Bitget Innovation Zone
In case you want to explore new and innovative projects, but the fear of risk is holding you back - look no further than the Bitget Innovation Zone!
Gone are the days of feeling anxious and uncertain about investing in untested waters. With Bitget Innovation Zone's 60-day valuation period, you can rest assured that each token listed has been thoroughly vetted and analyzed for potential risks.
The Innovation Zone is designed for the easy trading of new token offerings, allowing users to do so directly from their Bitget accounts. In addition, the Innovation Zone considers the safety of users who may be unfamiliar with the risks associated with trading these new token offerings.
Visit Bitget Innovation Zone now!
Bitget takes quality assurance seriously, so each digital asset we list undergoes a rigorous evaluation process. Our standards are high, and we consider numerous factors before listing a token, such as trading volume and liquidity, team involvement, project development, network or smart contract stability, community activeness and responsiveness, and even negligence or unethical conduct.
How to access Innovation Zone on Bitget?
Accessing the Innovation Zone on Bitget is simple and straightforward. Here are the steps to follow:
- For web users
Step 1: Visit Bitget website and create a new account or log in to your existing one.
On the homepage, scroll down and find ‘Innovation’. Click on ‘See more’ to discover more trading pairs.
You can select ‘Markets’ from the Homepage's menu. Scroll down and you will see the Innovation Zone under Spot Market.
Or you can simply click here to enter Bitget’s Innovation Zone page.
Step 2: Select your preferred trading pair. You can seek the availability of a cryptocurrency on Innovation Zone by entering its name in the search box.
- For APP users
Ensure you have downloaded the Bitget App on your Android or iOS device and registered your Bitget account.
Step 1: Go to ‘Innovation’ on the homepage.
You can also go to ‘Markets’ and find ‘Innovation’ under the Ranking section.
Step 2: Select your preferred trading pair. You can seek the availability of a cryptocurrency on Innovation Zone by entering its name in the search box.
Not a Bitget user yet? Sign up today for more insights and receive a $5005 reward!
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The information, views, and opinions expressed in this report are those of Bitget at the time of publication and are subject to change due to economic or financial circumstances. We do not guarantee that this report will be updated or revised to reflect any changes that may arise after the date of publication.
This report is intended for informational and educational purposes only and should not be construed as legal, tax, investment, financial, or other advice. Bitget, our employees, agents, partners, and/or co-operations will not be held responsible for any decision made, action taken, or result obtained from or in reliance on the use of the information provided in this report. It is imperative that any investment or trading ideas, strategies, or actions are never taken without first taking into consideration each individual's personal and financial situation and/or without consulting financial professionals.
