CRYPTO MARKET UNDER ATTACK – USDC SHOCK – WHAT NEXT?
We’re going to have a look at USDC, we’re going to have a look at the traditional banking sector and see why its failure is happening and how it’s impacting the crypto space and what to expect moving forward more importantly.
So, it’s just another day in cryptocurrency and a stable coin is deep-heg’d and look, I want to sort of go over a lot of the stuff., So look, USDC is down 8.78% at the time of recording this video at 0.9122 ranked fifth by market cap. So, my biggest concern when we had the news surrounding BUSD, you know, again, I think this actually it was initiated from circle to be honest with you, which is rather interesting when we look at where circle is positioned right now on USDC.
So my biggest concern when we had all this news around BUSD and not being able to mint anymore was that people were going to move from BUSD and they were going to go into other stable coins like USDT, USDC. Now my go to stable coin was BUSD before obviously the news with BUSD. So, I vocalize that this was a concern that I had and I talked a lot about risk management. I talked about, you know, asking yourself whether you needed to hold that risk of holding a stable coin, you know, make sure you understand the risks involved with each stable coin because stable coins, there are different types and so forth.
So, like my first question to people asking me, you know, what stable coin should they move from BUSD to was look, you know, do you need to be holding stable coins is the first question you need to be asking yourself. And if you want to learn more about risk management, we do have a course on cheekyschool.com. Super great value. Pretty cheap to be honest. I think risk management is, you know, and is and should be the backbone of every investor. So, you know, it’s really important to go check it out.
You know, there’s people that have done very, very well. They’ve picked the altcoins with the biggest gains done tremendously well. They’ve traded the market impeccably, but because they had no risk management or a very low level of risk management, they lost all of their money. You know, this could be by leaving it on FTX exchange, for example, or another exchange that that collapsed. You know, if you make a million dollars trading the market impeccably, but you had all 100% of your portfolio on FTX, then that’s really on you. That’s poor risk management.
You know, you should only have a percentage of it on that exchange. So, I talk about risk management. I think it should be the backbone if you don’t understand risk management and what I’m talking about here. Go check out the course. It’s cheap as chips. And I think it’s definitely worth doing. And, you know, it gives you a bit more understanding of what the risks are. So, you know, there’s risk holding crypto on an exchange. There’s risk holding stable coins on an exchange.
You know, how many risks do you hold? Do you need to hold those risks and so forth? So, look, this stuff’s really important. Go check it out. But, you know, after, you know, BUSD, my stable coin of choice was USDC over USDT. Nick highlighted, obviously, there wasn’t many trading pairs on Coinbase, which was a little bit surprising with the members in the respect that I can explain this. Coinbase is a huge supporter of Circle and USDC.
Yeah, there’s very few trading pairs, a bit confusing, really, really right. Let us know your thoughts and opinions on that in the comments below. I don’t think this is planned or anything like that. I just think that they have exposure to a bank that a lot of crypto companies have exposure to. So, we’re going to dig into that in more detail. Let’s move on. I’ve recorded this video once before. I messed it up because it’s far too early. So, let’s just go to the original post I wanted to share, which was following the confirmation at the end of the day that the wires initiated on Thursday to remove balances were not processed. $3.3 billion of the USDC remains at USDC. So, look, they’re basically working to protect USDC.
But, you know, 3.3 billion of it is in SVB. That’s what Circle is saying. Now, what they’re also saying here, and this is kind of circling to it to points I’ve been raising in previous videos, but maybe better articulated than how I’ve been articulating it if I can talk today. Basically, Circle is currently protecting USDC from Black Swan failure in the US banking system. SVB is a critical bank in the US economy and its failure without a federal rescue plan will have broader implications for businesses, banking, and entrepreneurs. So, look, I’ve come onto my expectations of what I think is going to happen towards the end of this video and what I’m doing.
Yeah, but let’s stay on point with what’s going on here. We’ve got regulators taken over the bank. I think that’s important to highlight. They don’t really want to get into the article too much. USDC stable coin and the crypto market go haywire after Silicon Valley bank collapses. See, obviously, USDC’s normal price sank to 89 cents from $1. Ethereum gas fees soared hours after the crypto-tied bank failed. What a surprise. There are a few things to take from this. Obviously, stable coins are tied to the traditional banking system. So, they’re only as safe as the traditional banking system. The other one is Ethereum still has huge problems when it comes to gas fees. That’s why I think layer two is going to do really well, not just on Ethereum but on many chains because as soon as there’s a load of volume, the gas fees just become extortionately high. Coinbase pauses conversions between USDC and USD as the banking crisis. One thing that we need to just cover here. This individual is saying, OK, it’s wild.
The market seems to be pricing in 100% of the 3.3 billion USDC reserves lost at SVB. It’s basically it should be 91 cents, 97 cents fair value based on 3.3 billion reserves. However, it looks like uninsured depositors at SVB can expect to get back 80 cents on the dollar. So this means that USDC reserves will get a 20% haircut, 660 million, not 100% of the 3.3 billion. I don’t know how true this is. It’s something to take into consideration.
My personal view is the USDC will be fine. It will get back to PEG. Overall, there’s a lot of panics because there are a lot of uneducated people investing in cryptocurrency and not financially literate and probably not fit to even do much U-laces up. I think you’ve got to take the overreaction as just part of the crypto space in my opinion. The final thing I want to talk about is where we’re heading and what I’m doing. I have a concern, micro-strategy. I’m here in rumors that they might have some exposure to the bank, Silicon Valley Bank, and they hold an awful lot of Bitcoin.
So, you know, complete speculation. But I just want to put it out there that this bank is very much tied to crypto and there could be many different risks and associations with that particular bank and cryptocurrency, not just onboarding and off-boarding on some of the exchanges. So, look, I think we’ve been pretty much bang on when it comes to how we kind of expect this market to play out. I explained to our viewers, our community, about risk and stable coins. I made paid content, free content around stable coins a while back around some of the concerns that I have. I really wanted people to be able to understand the risks of stable coins and understand stable coins in far more detail, the importance of stable coins, and all that sort of wonderful stuff.
So, do jump in the discord, and check all that stuff out. We are doing all this stuff because we want people in the community to be successful, right? And we talk our minds, we talk about how we truly see the market and, you know, it’s all in, I guess, the cause of trying to help people be successful. We quite often go against the narrative because the narrative isn’t always, you know, accurate and, you know, we get a lot of negativity for that. We don’t get as many views because of that. But ultimately, I don’t think that we’ve done anything, you know, incorrectly in the way that we’ve moved through the bear market. I think, you know, we have been probably one of, if not the only channels that were highlighting potential opportunities around FTX. We highlighted FTX before ZZ’s tweet came out and made everybody aware of that. We highlighted the opportunities to short Solana at over $30 FTT before the collapse of FTX. We highlighted BlockFi before anybody even spoke about it.
We highlighted concerns around several different exchanges that are under investigation still to this day. And, you know, we called the bottom in June in May. We then said that actually, that didn’t feel like the real bottom. We expect lower lows. We were ridiculed for that. We then went on to see the new lower low in November come in, which again, you know, we were we were been 100% accurate on a lot of these things, you know, around stable coins. We highlighted the risks and the potential of this happening. It kind of has happened, not how we kind of were thinking it was going to. But, you know, it was one of the biggest concerns that we had. We’ve highlighted all of this stuff to try to keep people as safe in the space as possible.
I hope people do appreciate what we’re doing here. I hope people have benefited from what we’ve put out over the last few months. I see, you know, big influences talking about how easy it is to predict the crypto market and how they’ve been particularly accurate for over, you know, six or so years and just loads of BS and just remember those people that said it was going to be different this time. Now, I am one of those people that said it would be different this time.