$70M at Risk of Liquidation if USDC Depegs: Traders Betting on Revival

• $70 million in USDC positions are at risk of liquidation if the stablecoin depegs by 10%.
• The panic was caused by Circle, the company that issues USDC, tying up $3.3 billion in troubled Silicon Valley Bank (SVB).
• USDC regained its peg on Monday, but traders can still face eight-figure liquidations if it falls below 99 cents or 93 cents.

Risk of Liquidation

Traders using decentralized finance (DeFi) protocols to bet on a USDC revival over the weekend are at risk of eight-figure liquidations if the stablecoin loses its $1 peg again this week. According to data from DeFiLlama, there are $70.8 million in positions that can be liquidated between $1.00 and 90 cents, with two recently filled positions on interest protocol Compound being worth $20.7 million and $15.4 million, respectively.

Cause of Panic

The panic was caused by Circle, the company that issues the stablecoin, announcing it had $3.3 billion tied up in troubled Silicon Valley Bank (SVB). This resulted in USDC slumping to a low of 88 cents on Saturday.

Relief After Regaining Peg

Circle revealed Sunday the $3.3 billion would be available at U.S. banks on Monday, quelling fears over a potential suspension in redemptions and allowing USDC to regain its peg on Monday .

Downside Risk Still Remains

However there is still downside risk for traders as the first of two Compound positions worth $20.4 million will be liquidated if USDC hits 99 cents; the price point for the other position is at 93 cents .


Traders betting on a USDC revival are currently in healthy profit but remain exposed to significant losses should another depeg occur this week .