Silvergate issues have triggered a market sell-off.
Prices of major cryptocurrencies dropped with millions in liquidation.
Stablecoins enjoyed a fair spike in trading volume following the turmoil.
Silvergate has been going through turmoil as the bank recently announced that there would be a delay in filing its annual 10-K report and also announced that it would have to review its books with its auditors.
The Silvergate drama triggered a market sell-off, with over $240 million in liquidation in the last 24 hours, according to Coinglass data.
The market also reversed course, with the majority of the coins trading in the red. The volatile market definitely attracted investors to stablecoins as a substitute, primarily USDT and USDC.
According to CoinMarketCap data, there has been a 24.2% spike in the 24-hour trading volume for Tether (USDT). USDC is no exception, as the stablecoin enjoyed a 27.4% spike in the 24-hour trading volume. At press time, the 24-hour trading volume of Tether stands at $38 billion and that of USDC at $4 billion.
Stablecoins are designed to maintain stability and keep their peg even during the most volatile market. Due to this reason, they come as an attractive last resort during volatile market conditions.
The price of major cryptocurrencies, including Bitcoin and Ethereum, dropped by over 4% in the last 24 hours. BTC dropped below the $23,000 level and ETH below $1,600. The majority of the altcoins displayed single-digit losses, except for a few assets, including DYDC and LUNC, which lost double digits in the last 24 hours.
Following the Silvergate issue, the stock price of Silvergate plummeted by over 50%, and cryptocurrency businesses began distancing themselves from the bank. Firms including Crypto.com, Coinbase, Galaxy, Circle, and Paxos mentioned that they were discontinuing any trading activities with the bank, citing precautionary measures.
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