• The crypto industry was shaken when Circle couldn’t withdraw its $3.3 billion from Silicon Valley Bank, leading to massive selloffs and deep losses for investors.
• An unlucky investor lost deeply in a failed transaction after using KyberSwap aggregation router to dump crypto tokens into USDT without setting a price slippage.
• USDC has since dropped 13.68% of its market cap, losing its peg on the US dollar.
Crypto Investor’s Nightmare
Every crypto investor’s nightmare starts when a sudden change in the industry leads to panic and massive selloffs. The effect of these two occurrences usually leads to uncontrollable price dips and deep losses for investors. An example of such an event is the news that Circle couldn’t withdraw its $3.3 billion from Silicon Valley Bank, which was shut down by the California Department of Financial Protection and Innovation.
Deep Loss For Crypto Investors
When Circle announced it hadn’t received a wire transfer of $3.3 billion from Silicon Valley Bank, many USDC investors panicked and started withdrawing their funds as soon as the news broke out. This caused USDC stablecoin to depeg from the US dollar and some investors were fast enough to exchange their USDC for USDT while an unfortunate investor wasn’t so lucky in his case. A Twitter post shared by BowTiedPickle revealed that he made a $2 million payment but only received $0.05 USDT due to not setting a slippage which would have allowed him to set the price for his transaction to go through properly instead of relying on shady methods like dumping tokens into USDT liquidity pools with no protection against loss or volatility risk .
USDC Market Crash
As a result of this incident, USDC market crashed by over 13% on the chart causing deep losses for investors who had heavily depended on it being pegged with the US dollar at all times especially during times of high volatility in other cryptos like Bitcoin (BTC).
Silicon Valley Bank Closure
The closure of Silicon Valley Bank resulted in further shockwaves across the crypto world as more restrictions were put in place prompting exchanges like Silvergate To Close Bank And Wind Down Operations resulting in more loss for investors who had relied heavily on these banks and financial institutions for services related to trading cryptos..