Huobi Exchange Leads the Way in Response to Latest Stablecoin Scare
Over the weekend, the crypto market faced another scare as USDC lost its peg to the US dollar, causing a significant drop in its market cap and triggering instability in the stablecoin market.
Circle, the issuer of USDC, revealed that $3.3 billion of its $40 billion reserves were stuck in Silicon Valley Bank, which is now under Federal Deposit Insurance Corporation (FDIC) control. This news caused many traders and investors to become anxious and led to significant movements in the market.
One of these movements came from Huobi, a crypto exchange that reportedly exchanged $100 million worth of USDC for DAI early on Saturday morning, according to blockchain tracking firm Lookonchain.
It appears that one of #Huobi's wallets also exchanged 100M $USDC for 100M $DAI ~40 mins ago. @justinsuntronhttps://t.co/uQmOBjq1Fu pic.twitter.com/rjkW3KUarS
— Lookonchain (@lookonchain) March 11, 2023
Justin Sun, the founder of Tron and a crypto billionaire who supports Huobi, was also seen withdrawing 82 million USDC from Aave, an Ethereum-based lending platform, and trading it for DAI.
Justin Sun withdrew 82M $USDC from #Aave and exchanged for 82M $DAI 10 mins ago.https://t.co/VSzfhjAuQb pic.twitter.com/piFgAMsdZm
— Lookonchain (@lookonchain) March 11, 2023
In addition, Lookonchain observed a whale named CZSamSun making a large arbitrage play by borrowing USDT to buy USDC at a lower price and hoping to return the loan after USDC returned to its dollar peg. This move had the potential to result in a profit of over $1.3 million.
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These efforts to mitigate risk and take advantage of arbitrage opportunities seem to have worked, since both USDC and DAI are trading at $0.99.
The instability in the stablecoin market has caused concern among investors and highlighted the risks associated with these types of cryptocurrencies.
As the crypto market continues to evolve and mature, we will likely see more stability mechanisms put in place to prevent incidents like this from occurring in the future.
In the meantime, traders and investors will need to remain vigilant and adapt quickly to changes in the market to minimize their risks and maximize their profits.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
