USDC Temporarily Depegs on Binance Amidst Crypto Market Sell-Off
In a surprising move that startled the cryptocurrency market, Circle's USDC stablecoin, which is typically pegged to the dollar, momentarily depegged from its $1 value. It fell as low as $0.76 on the Binance exchange platform. This incident occurred during a market-wide sell-off, which was spurred by skepticism over the potential approval of a spot bitcoin ETF this month. Notably, USDC experienced three distinct price drops against its tether (USDT) trading pair on Binance between 12:10 and 12:21 UTC, hitting lows of $0.76, $0.803, and $0.80 before quickly recovering back to its $1 peg each time.
Lack of Liquidity and Derivatives Liquidation Contributed to the Depegging
This depegging is likely the result of a lack of sufficient liquidity when large sell orders were placed for USDC in exchange for USDT. The Binance 2% market depth for the USDC/USDT pair revealed a skew towards the upside, indicating that any sell order larger than the $6.1 million liquidity floor could force the price below its usual fluctuation of $0.98. The instability was also influenced by a $500 million liquidation in derivative positions following a report that speculated on the SEC's rejection of various spot bitcoin ETF applications.
USDC's Unusual Volatility as a Stablecoin
The volatility of USDC is particularly notable given its usual stability as a fiat currency-backed stablecoin, exchangeable at a 1:1 ratio with the US dollar. Such drops can cause ripples across the crypto market, affecting trust and perceived stability, although this time appears to be a contained event. This isn't the first time USDC has experienced a depeg; it notably traded down to $0.877 following the collapse of Silicon Valley Bank earlier in March 2023, a situation that arose due to a portion of its reserves being held at the beleaguered bank.
Similar Depegging on Okx
Binance was not alone in experiencing a depeg of the USDC stablecoin; Okx also encountered a similar issue, albeit to a lesser degree, with USDC dropping to $0.955. Interestingly, the depegging on Okx commenced earlier than on Binance, beginning at 12:01 and persisting until 12:21 UTC, contrasting with the three snap-back recoveries observed on Binance's platform.
What is your preferred stablecoin? Share your thoughts and opinions about this subject in the comments section below.
Frequently Asked Questions
What precious metals may I allow in my IRA?
The most common precious metal used for IRA accounts is gold. Gold bullion coins and bars are also available as investments.
Precious Metals are safe investments since they don’t lose value over the long-term. They can also be used to diversify investment portfolios.
Precious metals include silver, platinum, and palladium. These metals all share similar properties. Each metal has its own use.
For instance, platinum can be used in jewelry manufacturing. The catalysts are made from palladium. The production of coins is done with silver.
It is important to consider how much money you are willing to spend on your precious metals when making a decision about which precious material to choose. A lower-cost ounce of gold might be a better option.
It is also important to consider whether you would like to keep your investment confidential. If you are unsure, palladium is the right choice.
Palladium has a higher value than gold. However, it is also rarer. It's likely that you will have to pay more.
Storage fees are another important consideration when choosing between silver and gold. You store gold by weight. You will pay more if you store larger amounts.
Silver is best stored in volumes. Silver is priced by volume. You will pay less to store smaller amounts.
You should follow all IRS rules if you plan to store precious metals in an IRA. This includes keeping records of transactions and reporting them back to the IRS.
Which type of IRA is the best?
It is essential to find an IRA that matches your needs and lifestyle when you are choosing one. You should consider whether you wish to maximize tax deferred growth, minimize taxes now, pay penalties later or avoid taxes altogether.
The Roth option is a good choice if you have a lot of money saved for retirement, but not enough to invest. It is also an option if you are still working after age 59 1/2. You can expect to pay income taxes for any accounts that are withdrawn.
If you plan on retiring early, the traditional IRA may be better because you'll likely owe any taxes on the earnings. But if you're going to work well past age 65, the Roth IRA might make more sense since it allows you to withdraw some or all of your earnings without paying taxes.
Should you open a Precious Metal IRA
The answer depends on whether you have an investment goal and how much risk tolerance you are willing to take.
Register now if you want to save money for retirement.
Because precious metals are highly likely to appreciate over time, They offer diversification advantages.
In addition, gold and silver prices tend to move together. This makes them an excellent choice for investors in both assets.
Precious metal IRAs are not recommended for anyone who isn't planning to use their money for retirement and doesn't want any risk.
Statistics
- Depending on your financial situation, most experts recommend you invest no more than 5% to 10% of your retirement funds in precious metals. (forbes.com)
- SEP-IRA”Simplified employee pension” For self-employed people like independent contractors, freelancers, and small-business ownersSame tax rules as traditional IRASEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less4. (sltrib.com)
- Same tax rules as traditional IRA SEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less Before setting up a Silver IRA, understand the fees and IRS restrictions. (sltrib.com)
- Silver must be 99.9% pure • (forbes.com)
External Links
investopedia.com
regalassets.com
wsj.com
takemetothesite.com
How To
How to determine if a Gold IRA works for you
Individual Retirement account (IRA), is the most widely used type of retirement plan. IRAs can be obtained through banks, financial advisors, mutual funds, employers and banks. Individuals can contribute as much as $5,000 per year without any tax consequences. This amount can be deposited into any IRA, regardless your age. However, there are limits on how much money you can put into certain IRAs. You cannot contribute to a Roth IRA if you are under 59 1/2 years of age. Under 50-year-olds must wait until they reach 70 1/2 years of age before you can make contributions. Additional, employees who work for their employer might be eligible to receive matching contributions.
There are two types: Roth and Traditional IRAs. Traditional IRAs let you invest in stocks, bonds, and other investments. Roth IRAs only allow you to make after-tax money. Contributions to a Roth IRA aren't taxed when they come out, but withdrawals taken from a Roth IRA are taxed once again. Some people choose to use a combination of these two accounts. Each type of IRA comes with its own pros and cons. So what should you consider before deciding which type of IRA works best for you? Here are three things to keep in mind:
Traditional IRA Pros:
- Companies have different options when it comes to contribution options
- Employer match possible
- Save more than $5,000 per Person
- Tax-deferred tax growth until withdrawal
- Income level may be a factor in some restrictions
- The maximum contribution limit is $5,500 per year ($6,500 if married and filing jointly)
- The minimum investment is 1000
- After you turn 70 1/2, you can begin receiving mandatory distributions
- You must be at the least five years of age to open an IRA
- You cannot transfer assets between IRAs
Roth IRA pros
- Contributions are tax-free
- Earnings can grow tax-free
- There are no minimum distribution requirements
- Only stocks, bonds, mutual funds are available as investment options.
- No maximum contribution limit
- There are no limitations on the ability to transfer assets between IRAs
- You must be at least 55 to open an IRA
You should be aware that not every company offers the same IRAs. Some companies provide the choice of a Roth IRA as well as a traditional IRA. Others will give you the option to combine them. You should also note that different types of IRAs may have different requirements. Roth IRAs have no minimum investment requirements, while traditional IRAs require a minimum $1,000 investment.
The Bottom Line
It is important to decide whether you want taxes now or later when you choose an IRA. A traditional IRA may be the right choice if you retire within ten years. Otherwise, a Roth IRA may be better suited for you. It doesn't matter what, it is a good idea consult a professional to discuss your retirement plans. Someone who understands the market will be able to recommend the best options.
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