[PART 3] The Veracity of The USDC Crash Rumor On July 2022
This is the final piece in the USDC FUD analysis of the past few days. If you haven’t read parts 1 and 2, please consider those two readings before reading this part.
In part 3, I continue to provide further evidence in the current USDC context. The proofs will relate to traditional finance and require a certain financial literacy from the reader!
![[PART 3] The Veracity of The USDC Crash Rumor On July 2022](https://news.coincu.com/wp-content/uploads/2022/07/image-694.png "[PART 3] The Veracity of The USDC Crash Rumor On July 2022 1")
Transparency In The Number of Back Assets For USDC
The reason users trust USDC over time over USDT is because of the transparency in declaring USDC’s collateral and supply. Because every year Circle has to submit a report to Grant Thornton LLP (the leading private auditing agency in the US) and will be reviewed by the US Government Securities Commission (SEC).
People can access and learn more here.
Comment
As of April 7, 2022, USDC and Circle have not shown any signs of possible collapse because of factors such as transparency in assets, high liquidity and completeness of collateral, and incomplete FUD information. proved correct.
Therefore, temporarily the above information about USDC is unfounded in many points as analyzed above. Until the arguments about the risk USDC is facing have solid evidence, at the moment, Circle and the USDC reserve fund are still in a safe state.
Will Users Flee From USDC Like They Did With USDT?
On May 11, 2022, when USDT lost its peg, people rushed to swap from USDT to USDC or BUSD causing the market cap of USDC to increase and USDT to decrease. The chart below shows the growth of USDC capitalization against USDT decreasing during USDT losing peg in April-May 2022 (according to Coindesk)
When the market is a downtrend, asset prices include the types of investments that the treasury fund aims to back for USDC involving high-risk collateral assets such as BTC, ETH, coins/tokens in general (excluding stablecoins) ) will likely be liquidated if the lenders are involved.
Even if FUD about Circle is correct when they suffer from lending using highly stablecoins like USDC, investor confidence in the market will decrease even more. Top stablecoins such as USDT, USDC have long been seen as a pillar of confidence for crypto market participants. In particular, the collapse of the UST, has made the anchor of confidence in stablecoins even worse.
If the scenario of USDC collapses, the consequences will be huge when the crypto market has been depleted of confidence The trend of withdrawing or redeeming from USDC to USD will cause a large amount of USDC in the market but Circle’s collateral is not enough ⇒ USDC loses its peg more severely and USDC users will also be systematically affected.
How to Look At the Rumour of USDC?
Consult with KOLs who specializes in exposing unsustainable models
KOLs specialize in exposing scam models, and the unsustainability of projects/protocols like OxHamz, OxFoobar, etc. When they write about a project model that has any weaknesses, they all make plans. reason with data and cite sources or at least provide relevant evidence.
However, the source of the person who posted this tweet about USDC is merely stating an opinion and has no evidence to support his point of view.
⇒ Therefore, the information he provided about USDC is not convincing enough that USDC is at risk of collapse.
Some Positive News Regarding USDC
Bybit Launches USDC Futures as Collateral
Before that, exchanges often used USDT or BTC as collateral for futures contracts. However, Bybit has provided an additional option of collateral for USDC-settled futures.
⇒ This proves the great confidence in USDC instead of Bitcoin by Bybit, for them USDC brings high stability.
New York Community Bank (NYCB) Becomes Fund Holder Of USDC Stablecoin?
On June 29, 2022, NYCB – a New York bank agreed to become one of the asset management agencies of USDC Reserve.
The fact that a US state-owned bank and Circle come to a mutual agreement is a positive sign in the context of US law agencies tightening supervision of stablecoins after the collapse of the UST.
On the other hand, we can see that it is advisable for stakeholders to monitor each other. Why?
Real case: In June 2022, Gray Scale applied for a license to become an ETF, however, the SEC refused and they were sued by GrayScale for the above decision.
From the above problem, we can see that private or public enterprises, will all have their own duties/aspirations and they are ready to fight for them, even if they have to sue each other.
Although being involved in litigation will have a negative effect, the incident in certain aspects is positive when it upholds the spirit of democracy. One of its manifestations is that businesses have the right to oppose decisions of competent authorities to protect the interests of the organization.
If the parties cannot come to a common agreement, they will be able to seek litigation to monitor each other and find arguments/views from many different prisms. From there, the point of view is agreed to bring common benefits to the organizations involved.
Lessons Learned From Rumours
Soberly See Things, the Source of The Problem
The lesson I learned from this event is not to let the FUD news influence our thoughts and actions before we learn enough about them.
When we practice this when information appears in front of our eyes, the first thing we do is not to put it in the brain passively, if we encounter fake news, the consequences will not be. good.
On the contrary, when we form the habit of verifying, we will be proactive in receiving that news and processing them with filter funnels based on our background, knowledge, and experience. From there, rank them to see if the news is correct for us to take in and make decisions based on them.
Case Study
One side tweeted that 3AC and Alameda‘s Twitter accounts had deleted the tweets (implication: these funds are at risk) in light of the ongoing 3AC and Alameda issues related to stETH losing pegs or stETHs. recent debt bubble.
However, those who received the information did not verify its correctness. Then, thanks to the confirmations of KOLs, the community realized that this was just FUD because these two accounts never posted tweets, but only created nicks to register ownership on Twitter for their organizations.
Verdict
Thus, I have helped people understand more about USDC-related FUD and verify its possibilities and correctness. In addition, I also validate the factors that can lead to the possibility of USDC collapse (if any) to prevent the worst-case from happening.
Rumours about the collapse of USDC are currently still conspiracy theories and unproven arguments. However, through this case, we can also learn some more aspects, cases, and perspectives to prepare us for the next step with the “fertile” crypto market with opportunities but also full of risks.
If you have any questions, comments, suggestions, or ideas about the project, please email ventures@coincu.com.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
Marcus
Coincu Venture
Author
Analysis
[PART 3] The Veracity of The USDC Crash Rumor On July 2022
This is the final piece in the USDC FUD analysis of the past few days. If you haven’t read parts 1 and 2, please consider those two readings before reading this part.
In part 3, I continue to provide further evidence in the current USDC context. The proofs will relate to traditional finance and require a certain financial literacy from the reader!
Transparency In The Number of Back Assets For USDC
The reason users trust USDC over time over USDT is because of the transparency in declaring USDC’s collateral and supply. Because every year Circle has to submit a report to Grant Thornton LLP (the leading private auditing agency in the US) and will be reviewed by the US Government Securities Commission (SEC).
People can access and learn more here.
Comment
As of April 7, 2022, USDC and Circle have not shown any signs of possible collapse because of factors such as transparency in assets, high liquidity and completeness of collateral, and incomplete FUD information. proved correct.
Therefore, temporarily the above information about USDC is unfounded in many points as analyzed above. Until the arguments about the risk USDC is facing have solid evidence, at the moment, Circle and the USDC reserve fund are still in a safe state.
Will Users Flee From USDC Like They Did With USDT?
On May 11, 2022, when USDT lost its peg, people rushed to swap from USDT to USDC or BUSD causing the market cap of USDC to increase and USDT to decrease. The chart below shows the growth of USDC capitalization against USDT decreasing during USDT losing peg in April-May 2022 (according to Coindesk)
When the market is a downtrend, asset prices include the types of investments that the treasury fund aims to back for USDC involving high-risk collateral assets such as BTC, ETH, coins/tokens in general (excluding stablecoins) ) will likely be liquidated if the lenders are involved.
Even if FUD about Circle is correct when they suffer from lending using highly stablecoins like USDC, investor confidence in the market will decrease even more. Top stablecoins such as USDT, USDC have long been seen as a pillar of confidence for crypto market participants. In particular, the collapse of the UST, has made the anchor of confidence in stablecoins even worse.
If the scenario of USDC collapses, the consequences will be huge when the crypto market has been depleted of confidence The trend of withdrawing or redeeming from USDC to USD will cause a large amount of USDC in the market but Circle’s collateral is not enough ⇒ USDC loses its peg more severely and USDC users will also be systematically affected.
How to Look At the Rumour of USDC?
Consult with KOLs who specializes in exposing unsustainable models
KOLs specialize in exposing scam models, and the unsustainability of projects/protocols like OxHamz, OxFoobar, etc. When they write about a project model that has any weaknesses, they all make plans. reason with data and cite sources or at least provide relevant evidence.
However, the source of the person who posted this tweet about USDC is merely stating an opinion and has no evidence to support his point of view.
⇒ Therefore, the information he provided about USDC is not convincing enough that USDC is at risk of collapse.
Some Positive News Regarding USDC
Bybit Launches USDC Futures as Collateral
Before that, exchanges often used USDT or BTC as collateral for futures contracts. However, Bybit has provided an additional option of collateral for USDC-settled futures.
⇒ This proves the great confidence in USDC instead of Bitcoin by Bybit, for them USDC brings high stability.
New York Community Bank (NYCB) Becomes Fund Holder Of USDC Stablecoin?
On June 29, 2022, NYCB – a New York bank agreed to become one of the asset management agencies of USDC Reserve.
The fact that a US state-owned bank and Circle come to a mutual agreement is a positive sign in the context of US law agencies tightening supervision of stablecoins after the collapse of the UST.
On the other hand, we can see that it is advisable for stakeholders to monitor each other. Why?
Real case: In June 2022, Gray Scale applied for a license to become an ETF, however, the SEC refused and they were sued by GrayScale for the above decision.
From the above problem, we can see that private or public enterprises, will all have their own duties/aspirations and they are ready to fight for them, even if they have to sue each other.
Although being involved in litigation will have a negative effect, the incident in certain aspects is positive when it upholds the spirit of democracy. One of its manifestations is that businesses have the right to oppose decisions of competent authorities to protect the interests of the organization.
If the parties cannot come to a common agreement, they will be able to seek litigation to monitor each other and find arguments/views from many different prisms. From there, the point of view is agreed to bring common benefits to the organizations involved.
Lessons Learned From Rumours
Soberly See Things, the Source of The Problem
The lesson I learned from this event is not to let the FUD news influence our thoughts and actions before we learn enough about them.
When we practice this when information appears in front of our eyes, the first thing we do is not to put it in the brain passively, if we encounter fake news, the consequences will not be. good.
On the contrary, when we form the habit of verifying, we will be proactive in receiving that news and processing them with filter funnels based on our background, knowledge, and experience. From there, rank them to see if the news is correct for us to take in and make decisions based on them.
Case Study
One side tweeted that 3AC and Alameda‘s Twitter accounts had deleted the tweets (implication: these funds are at risk) in light of the ongoing 3AC and Alameda issues related to stETH losing pegs or stETHs. recent debt bubble.
However, those who received the information did not verify its correctness. Then, thanks to the confirmations of KOLs, the community realized that this was just FUD because these two accounts never posted tweets, but only created nicks to register ownership on Twitter for their organizations.
Verdict
Thus, I have helped people understand more about USDC-related FUD and verify its possibilities and correctness. In addition, I also validate the factors that can lead to the possibility of USDC collapse (if any) to prevent the worst-case from happening.
Rumours about the collapse of USDC are currently still conspiracy theories and unproven arguments. However, through this case, we can also learn some more aspects, cases, and perspectives to prepare us for the next step with the “fertile” crypto market with opportunities but also full of risks.
If you have any questions, comments, suggestions, or ideas about the project, please email ventures@coincu.com.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
Marcus
Coincu Venture
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