Tether (USDT) Market Cap Soars 17% Amid Banking Crisis

• The banking sector could potentially undergo a much-needed revamp due to the collapse of Silicon Valley Bank (SVB), Signature Bank, and Silvergate Capital.
• As a result investors have flocked to the largest stablecoin, Tether (USDT). This has caused its market cap to surge 17% YTD.
• USDC’s market cap fell as it had exposure to SVB, but was saved by US regulators and Circle’s financial support.

Banking Crisis Prompts Flocking To Stablecoins

The traditional financial world has been rocked by the Credit Suisse chaos and the failure of a series of US banks such as Silicon Valley Bank (SVB), Signature Bank, and Silvergate Capital. Investors are now scrambling for safety nets, causing the largest stablecoin, Tether (USDT) to extend its lead with an increase in market cap by 17% Year-to-Date (YTD).

Circle’s Exposure To SVB

Fintech firm Circle had a $3.3 billion exposure to SVB which dragged its USDC token down to 88 cents instead of its usual one dollar price tag. Fortunately, the US regulators stepped in helping protect deposits in Silicon Valley while Circle promised financial support allowing USDC’s market cap to recover.

Tether Confirms No Exposure To SVB Or Silverbank

Tether had previously confirmed that it had no exposure or involvement with either SVB or Silverbank. Despite this confirmation, investors are still turning towards USDT for reliable protection from banking turmoil.

Stablecoin Crisis Aggravates

The threat caused by these recent events has only aggravated the existing stablecoin crisis further leading many investors towards USDT over other tokens like USDC.

Conclusion

The demise of these entities highlights how fragile traditional finance is compared to cryptocurrency solutions like stablecoins which provide reliable protection from banking turmoil even during turbulent times.