Shifting Preference for USDT in the Stable Currency Exchange Agreement Curve Due to Circle’s Announcement

03/11/2023 03:51 • Blockchain Buzz • 134 views

On March 11, it was reported that the proportion of USDT in the 3-pool of the stable currency exchange agreement Curve fell to 1.9%, leaving only 8.3 million, due to the influence of Circle’s announcement that it had $3.3 billion of reserves in the bankrupt bank Silicon Valley Bank. Users chose to exchange USDC and DAI (part of the collateral was USDC) for USDT. At present, the USDC/USDT has dropped to 0.93 in Curve exchange.

The proportion of stable currency in Curve 3Pool is seriously skewed, and the USDC USDT has dropped to 0.93

Analysis based on this information:

The stable currency exchange agreement Curve is a relatively recent development in the cryptocurrency market, which has grown to become a popular platform for the exchange of stablecoins. It aims to provide low slippage trading experience, and the 3-pool is an essential aspect of its functionality. Recently, there has been a shift in preference for USDT, which fell to 1.9% in the 3-pool, leaving only 8.3 million. This can be attributed to the impact of Circle’s announcement, which claimed it had $3.3 billion in reserves in the bankrupt bank Silicon Valley Bank. The announcement sparked uncertainty and fear, leading users to exchange their USDT for USDC and DAI, which were part of the collateral in the Curve 3-pool.

As a result, the USDC/USDT ratio dropped to 0.93 in the Curve exchange, indicating that users no longer prefer USDT. This could be due to the concerns regarding the stability of USDT, which has been associated with numerous controversies in the past. USDT is known to have low trading volume and liquidity compared to other stablecoins, which makes it susceptible to market volatility. The announcement by Circle raised questions about the transparency of USDT’s reserve holdings and highlighted the potential risks of relying on a single stablecoin to manage assets.

The shift in preference for USDT highlights the importance of transparency, trust, and reliability in the cryptocurrency market. The controversy surrounding Tether, the issuer of USDT, has led to increased scrutiny from regulators and market participants, emphasizing the need for better regulatory frameworks and standards. The cryptocurrency market is still in its early stages, and the innovations in stablecoin technology have shown promise. However, the risks and uncertainties associated with these assets must be addressed to ensure their long-term sustainability.

In conclusion, the shift in preference for USDT in the Curve exchange highlights the importance of transparency, trust, and reliability in the cryptocurrency market. The Circle announcement exposed the potential risks involved in relying on a single stablecoin, emphasizing the need for better regulatory frameworks and standards. The cryptocurrency market is still evolving, and the continued development of stablecoin technology requires careful consideration of the risks and uncertainties associated with these assets.

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