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 Editor-in-Chief of Coinspress and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.
