Not really sure how all these stable coins work but how did a stable coin that is supposed to be equal to one US Dollar go down in price?
USDC is made by Circle.
Circle has $3.3B deposits in Silvergate bank.
Silvergate bank files forced liquidation and that means a lot for Circle and mostly affecting USDC.
See news:
Crypto bank Silvergate announces liquidation amid sector turmoilJust like the collapse of UST and Luna, that means a lot to the market which affects the entire whole crypto market but I don't think that USDC will be ending the same as UST/USTC. And whenever there's sort of news like this, the involved crypto whether it's a stable coin or an alt coin, it's always been affected and getting a lot of dumps which results to its value goes down.
USDC has nothing to do with UST; it won't have the same fate. However, this is denting trust in cryptocurrencies, especially stablecoins. Do you believe that the USDC will recover? We are already seeing other stablecoins depegging; even BUSD has suffered losses, though minimal, and it's still below $1. DAI has also suffered a major decline, dropping to $0.93. This doesn't look too optimistic, and it may cause another huge crash in the market. This may also cause the end of stablecoin staking.
Yes, There is no comparison between UST and the USDC. Basically one of the reasons for the collapse of Silicon Valley banks in the US could be the reduction of the peg of this scalable coin. USDC stablecoin is currently the second-largest stablecoin by market cap. It is currently trading at $0.986463. But this kind of situation is not new in stable coins. Gradually it is returning to normal levels again.