Grandpa's check-in day 185

Let's continue to talk about USDC. As of this morning, the premium of USDC has risen rapidly, reaching a maximum of nearly 0.98. If this price stabilizes, there will be basically no risk. However, USDC continued to fall in the afternoon, and has now fallen to 0.94 again. This should be caused by profit-taking. After all, those who are really worried about the thunder basically ran away yesterday. According to the latest news from Circle, now we just have to wait for the bank to open tomorrow and start processing everyone's withdrawal needs. In addition, Circle's capital reserves are also sufficient, and there is a high probability that the deposits in Silicon Valley Bank can be recovered.

I personally believe that this crisis can be resolved. First of all, Silicon Valley Bank itself is not a bad debt or evil (according to the information currently available to the public). After being taken over by the Federal Deposit Insurance Corporation, it only needs to sell assets and handle withdrawals according to the procedures. In addition, this time there are more than 100 VCs and investors supporting Silicon Valley Bank, hoping that some institution or capital can take over. If it is not handled properly, it will impact many start-ups in Silicon Valley, which is something that even the Federal Reserve does not want to see. Therefore, there is no problem in withdrawing deposits from Silicon Valley Bank.

The main reason for the price plunge of USDC is the fear of a run, and with the previous experience of Luna and FTX, it is hard not to associate it with this. Moreover, the so-called black swans cannot be predicted in advance. What has happened in the past year is beyond the comprehension of ordinary people, so panic is normal. At present, the price of USDC needs Circle to start processing tomorrow to return to normal. Once the market is processed normally, it is judged that the price will return to normal under the influence of arbitrage funds. Of course, as to whether to risk losing a large amount of principal to gamble for a few points of profit, it depends on your risk preference.

Regarding the market, it is estimated that we are still waiting for the USDC issue to be finalized. It is estimated that the main players still have a large amount of USDC in their hands. Besides, there is a knife hanging over their heads, so they have no intention to operate. However, this incident is actually a negative factor, and it takes time for the market to recover after falling. There is no need to worry about a V-reversal. It is enough to increase this position to 50-60%. The rest will be considered when it fluctuates sideways, and some reserve funds will be kept to prevent extreme events.

Thank you for your attention and reading.