Market Analysis Report (15 Mar 2023)

Over $2.2 billion worth of USD Coin (USDC) was burnt since the start of this week as redemptions crossed $4 billion on Tuesday night, causing waves in the cryptocurrency sector.

The redemptions come days after Circle’s USDC stablecoin depegged from the $1 mark when Silicon Valley Bank (SVB), where $3.3 billion of the stablecoin’s reserves were being held, collapsed. The stablecoin restored its peg after regulators stepped in and ensured depositors would be made whole.

According to Arkham Intelligence data, some 723 million USDC were burnt in a single transaction in early Asian hours on Wednesday. The data also shows several other USDC burns took place over multiple separate transactions, ranging from $300 million to $600 million.

This brought the total burnt value of USDC to over $2.2 billion in a little over a single day. Burns refer to effectively taking tokens out of circulating supply by sending them to an address that’s not controlled by any entity. The USDC token burns could have possibly occurred  as a result of redemption activity.

Net redemptions of USDC crossed the $4 billion mark on Tuesday, as issuer Circle said over the weekend it would process all transactions and honor redemptions.

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• Source: https://www.cryptocompare.com/email-updates/daily/2023/mar/15/