Large Portions of USDC Locked and Unredeemable: Implications for Crypto Investors

03/12/2023 22:10 • Metaverse Matters • 137 views

It is reported that Conor, the business director of Coinbase, tweeted that it is noteworthy that a large part of USDCs are sticky and will not/cannot be redeemed immediately. For example, USDC with US $8.1 million is in the blacklist wallet. 10 million USDC is likely to be lost forever, and more than 200 million USD has been locked in FTX assets for many years. Hundreds of millions of funds are locked in the bankruptcy property with slow flow (15 million for Blockfi and 463 million for Voyager). Hundreds of millions of funds are locked in the slow flowing DAO/fund. For example, 2.42 million of the Covid relief fund in India (the fund has no flow in more than 12 months). The 9-10-digit USDC in the financial wallet of centralized enterprises.

Business director of Coinbase: A large part of USDCs will not be redeemed immediately

Analysis based on this information:

Conor, the business director of Coinbase, recently made a noteworthy tweet regarding the USDC stablecoin – a cryptocurrency pegged to the U.S. dollar. In his tweet, Conor revealed that a significant portion of USDCs are “sticky,” meaning that they cannot be redeemed immediately.

This revelation has raised concerns among crypto investors who may be holding USDCs. According to Conor, a large amount of USDCs, including 10 million USDCs, are likely to be lost forever due to being stuck in blacklisted wallets. Additionally, more than 200 million USD has been locked in FTX assets for many years, rendering it effectively unredeemable.

Furthermore, hundreds of millions of funds are locked in bankruptcy properties, including 15 million for Blockfi and an astounding 463 million for Voyager. This presents a significant problem for investors who may have been relying on these funds to be liquid.

Conor also highlighted that hundreds of millions of funds are locked in DAO/funds with slow flow. For example, 2.42 million of the Covid relief fund in India has no flow in more than 12 months, rendering it effectively useless for those who may be in need.

Finally, Conor mentioned that centralized enterprises hold 9-10 digit USDC sums in their financial wallets. These sums are also effectively locked and inaccessible for the time being.

The implications of Conor’s tweet are significant for crypto investors. The large portions of USDCs being locked and unredeemable could lead to a price increase in the short term, as the available supply decreases. However, it could also lead to a decrease in investor confidence in the long term, as the prospect of locked and unredeemable funds may make crypto investments seem less appealing.

Overall, Conor’s tweet highlights the need for caution and careful consideration when investing in cryptocurrencies. Crypto investors need to be aware of the potential risks and implications of investing in unstable currencies such as USDC.

In conclusion, while the rise of cryptocurrencies has transformed the financial landscape, the fact remains that these assets are still subject to many risks and uncertainties. Investors should always be wary and informed when investing in cryptocurrencies, and they need to be aware of the potential for locked, unredeemable funds when dealing with USDC.

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