Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[Biodom]

Coinbase are planning to resume redemption 1:1 of USDC for USD, once banks are open again, so arbitrage will play out of buying USDC under $1 and selling 1:1 for dollar until the price returns to parity. Despite all the doom and gloomers out there expecting USDC to go to zero, the likelihood hood (right now) of that happening is very low.

TL:DR: USDC de-pegging in this scenario isn't good or bad for Bitcoin, it's simply irrelevant.

Coinbase is just being optimistic. i would be surprised if they do so, although some people have said that even in the WORST case scenario (no buyer for SVB), FEDs would immediately issue a 62% 'dividend' with eventual recovery up to 94%.
So, it that case Circle gets 0.62X3.3=2.05 bil, with the shortfall "just" 1.254bil, which is about 3%, which later (1-2 years) becomes only about $200mil (6% of 3.3 bil).
Since Circle is earning about 1.56 bil/year on it's Treasuries, it is a situation that theoretically should resolve positively.

TL;DR If numbers are similar to what I posted, USDC might recover to about 0.97 by Monday.

[dragonvslinux]

Coinbase are planning to resume redemption 1:1 of USDC for USD, once banks are open again, so arbitrage will play out of buying USDC under $1 and selling 1:1 for dollar until the price returns to parity. Despite all the doom and gloomers out there expecting USDC to go to zero, the likelihood hood (right now) of that happening is very low.

TL:DR: USDC de-pegging in this scenario isn't good or bad for Bitcoin, it's simply irrelevant.

Coinbase is just being optimistic. i would be surprised if they do so, although some people have said that even in the WORST case scenario (no buyer for SVB), FEDs would immediately issue a 62% 'dividend' with eventual recovery up to 94%.

Coinbase doesn't care about SVB. They'll take the L imo and deal with it overtime. They have 5 other banks and fortunately only had 8% exposure ($3.3b) out of $40b in SVB.
You could say they got lucky... I would. Could have been more like 13% if it was split equally between the 6 banks they use. Or 50% if only two banks!
Then they would have been completely f**ked...

So, it that case Circle gets 0.62X3.3=2.05 bil, with the shortfall "just" 1.254bil, which is about 3%, which later (1-2 years) becomes about $200mil (6% of 3.3 bil).
Since Circle is earning about 1.56 bil/year on it's Treasuries, it is a situation sthat theoretically should resolve positively.

In this case, at worst, they lost 2 year of income then? I think they'll deal with it. Take the L and move on, maybe hope for the 62% compensation. After all Circle = Coinbase, so still lots of income.

The only real imminent concern would be USDC circulating supply dropping below $3.3 billion (-92%), as presumably that's what they can''t cover (at least not yet without a loan). That's why there will be selling from customers, but it'd take 90%+ redeeming for dollar for there to be a significant liquidity issue it seems. Meanwhile, I personally think they'd manage to secure a loan if that was happening.

Also, there are big VCs who stepped in to buy at $0.92 - almost as short-term loan - looking to redeem their USDC 1:1 for dollars on Monday. Ie they don't need USDC to go back to $1, they will just redeem 1:1. Then buy again presumably if USDC is still below $1, and recycle arbitrage... Maybe I'm being too optimistic, but I don't see this as an FTX-style enormous hole in bank balances. We're talking about a 8% liquidity loss.

TL;DR If numbers are similar to what I posted, USDC might recover to about 0.97 by Monday.

I know you said Monday, but the past hour it's already back to $0.98 !
Sure it could be below $0.97 by Monday, but even so...
Discount evaporating fast.
FUD is passing.

[Gachapin]

...

Oh yes... thanks.  You are absolutely right,  Bitcoin would very well be negatively effected by a stablecoin crash, if it was held as collateral by the stablecoin company.  
How did I miss that thought, when we just had the Luna debacle...

Would be interesting to know how many Bitcoins are used as collateral for the different stablecoins.  Just to get a feeling for the direct risk involved for the Bitcoin market.

Intersting thing is, a certain part of that stablecoin collateral BTC would be bought up by the very customers fleeing the collapsing stablecoin...  
So if that buying outweighed the selling of the BTC collateral, price would technically not be negatively affected from that side ...maybe

[ChartBuddy]

Explanation

[dragonvslinux]

...

Oh yes... thanks.  You are absolutely right,  Bitcoin would very well be negatively effected by a stablecoin crash, if it was held as collateral by the stablecoin company.  
How did I miss that thought, when we just had the Luna debacle...

Probably because it was very much a black swan event worth forgetting  
Kind of reminds me of BitConnect in 2018, getting into the Top 10 on CMC and being 100% ponzi as well.
Then blowing up spectacularly...

Would be interesting to know how many Bitcoins are used as collateral for the different stablecoins.

As far as I know, and I'm far from expert here, there is very little exposure to Bitcoin from stablecoins.
DAI has a very small amount in Wrapped BTC, USDD is backed by Tron I believe.
The rest are either fiat-backed or too insignificant if they do back with BTC.

Just to get a feeling for the direct risk involved for the Bitcoin market.

Basically very little, apart from Wrapped BTC which is $3b / 150K BTC locked up, though is redeemable 1:1 and has proof of reserves. So I won't worry about it.
WBTC would be the only risk I guess, but is different as not affected by Bitcoin's price, as it's a "stablecoin" pegged to BTC not dollar.

[Toxic2040]

[savetherainforest]

Please don't be mad at me guys
I feel like BTC should go down further and give me a chance to buy at more dip.

I did told you plebs to sell at 25K ... most of you didn't listen!              

Explanation

Prepare for $10K or some sh!t like that before the rally to 100K.            

I kinda sold almost everything. Even the sh!tcoins. Especially the sh!tcoins.  (I did kept some few things but maybe 10% from everything that was important)    

Prepare for dumpster.fire.sh!t.show!!        

*edit(0): I would advocate for at least $16K. I could say it could go lower, but you shouldn't be greedy.    

[Gachapin]

...

Oh yes... thanks.  You are absolutely right,  Bitcoin would very well be negatively effected by a stablecoin crash, if it was held as collateral by the stablecoin company.  
How did I miss that thought, when we just had the Luna debacle...

Probably because it was very much a black swan event worth forgetting  
Kind of reminds me of BitConnect in 2018, getting into the Top 10 on CMC and being 100% ponzi as well.
Then blowing up spectacularly...

BitCon(nect) was fun though... so much meme    Actually, due to its "great" marketing a better meme coin than that dogshitcoin.
Luna was no fun at all for me. lol

Would be interesting to know how many Bitcoins are used as collateral for the different stablecoins.

As far as I know, and I'm far from expert here, there is very little exposure to Bitcoin from stablecoins.
DAI has a very small amount in Wrapped BTC, USDD is backed by Tron I believe.
The rest are either fiat-backed or too insignificant if they do back with BTC.

Ok. So good chances that Bitcoin would not be much affected as a collateral.
I just read that tether also holds seemingly a tiny amount in "digital currencies".

Just to get a feeling for the direct risk involved for the Bitcoin market.

Basically very little, apart from Wrapped BTC which is $3b / 150K BTC locked up, though is redeemable 1:1 and has proof of reserves. So I won't worry about it.
WBTC would be the only risk I guess, but is different as not affected by Bitcoin's price, as it's a "stablecoin" pegged to BTC not dollar.

and technically, they wouldn't need to sell the BTC collateral on the BTC/USD market and tank the price, but just "give it back" to the WBTC holders

[ChartBuddy]

Explanation

[dragonvslinux]

Just to get a feeling for the direct risk involved for the Bitcoin market.

Basically very little, apart from Wrapped BTC which is $3b / 150K BTC locked up, though is redeemable 1:1 and has proof of reserves. So I won't worry about it.
WBTC would be the only risk I guess, but is different as not affected by Bitcoin's price, as it's a "stablecoin" pegged to BTC not dollar.

and technically, they wouldn't need to sell the BTC collateral on the BTC/USD market and tank the price, but just "give it back" to the WBTC holders

Technically, if for some reason they lost any reserves, got hacked etc, then they'd in fact have to dump any fiat profits into Bitcoin to make WBTC holders whole again.

Hence I'd strongly argue that any de-pegging event with WBTC due to lack of reserves wouldn't be bad for Bitcoin, instead the opposite.

I realise it's also gone from 285K to 153K BTC during bear market without much price fluctuation...

[hostm]

This is the last chance to change all stablecoins for bitcoin. Many did it at $ 16 - 17 k but now it is still possible. Remember this when bitcoin will be $ 35 - 40 k.

Stablecoins? It’s always a good time to change those into BTC. If you don’t the people behind the scenes of the stablecoin will do it with your money and keep the gains while leaving you the risk. I am not super confident we won’t retest $16K but I think the smart move remains buying as much BTC as you’re able as frequently as possible for this entire year.

Who didn't buy bitcoin for USDC two days ago?

[Hueristic]

OT: Good ol' Jim Cramer, still rug pulling clueless retail investors since the Bear Stearns fiasco and before.

CNBC's Jim Cramer eviscerated for touting Silicon Valley Bank weeks before disastrous collapse
https://www.foxnews.com/media/cnbcs-jim-cramer-eviscerated-touting-silicon-valley-bank-weeks-disastrous-collapse

Memba this? Pepperidge Farm 'members.

https://app.hedgeye.com/insights/70141-remember-this-jim-cramer-bear-stearns-is-fine-do-not-take-your-mon

Inverse Cramer ETF is coming to the real world

According to Tuttle Capital, both ETFs will hold 20-25 Cramer picks in an equally weighted allocation. Because Cramer often makes his picks live on TV (or via tweets), the fund will likely have significant turnover to maintain low tracking error with Cramer's recommendations.

https://www.nasdaq.com/articles/inverse-cramer-etf-is-coming-to-the-real-world

[ChartBuddy]

Explanation

[aesma]

Wild moves these days.

I'm trading BTC/USDC and there was a spike to 26000 causing me to sell several steps at this nice price, then buy back much lower. Was that only on my market (a large, established exchange) or did it happen everywhere ?

OK I see what happened, what I was fearing could happen, it's USDC that has issues.

My exposure is quite low but that's annoying, I don't know what to do now. I'm following the SVB thing and it doesn't seem to be a fraud or even a big mistake that caused the problems, and most of the money should be recoverable.

edit : some time ago I had removed most of the ladder steps up for a situation just like this, so that if USDC crashed irremediably I wouldn't be left holding tons of it and having sold all my BTC trading funds.

[ChartBuddy]

Explanation

[ChartBuddy]

Explanation

[Patrol69]

 Twitter

[ChartBuddy]

Explanation

[ChartBuddy]

Explanation

[Hueristic]

With USDC insolvency fears rampant, users are fleeing to safety in other stables. Not all of them are going to make it there in one piece, however.

Here's how one unlucky user paid $2,080,468.85 to receive $0.05 of USDT.

https://twitter.com/BowTiedPickle/status/1634415551450587138
https://twitter.com/KyberNetwork/status/1634524630139666432