USDC Depegging: Where to short USDC?

With traditional crypto banks keep falling like flies, fear, uncertainty and doubt (FUD) pile up regarding stablecoins that rely on these banks. The question arises as  to whether the cash reserves held by these banks will survive, and if not, whether the stablecoin has sufficient resources to honor any redemptions by precocious investors next week? 

USDC: Quick Maths

Taking a closer look at USDC’s situation, it appears that they claim to have $40 billion in reserves, with 25% or $10 billion in cash spread across six different banks. However, with the recent failure of Silicon Valley Bank (SVB), if the funds were evenly distributed, USDC may have lost up to $3.3 billion. In the worst-case scenario, they may not have sufficient funds to fulfill all redemption requests for USDC that WILL happen on Monday.

This could be problematic, although some speculate that SVB may have enough assets to cover most of its deposits. Furthermore, the SVB brand carries significant value due to its relationships with a majority of venture capital-backed startups. The only viable solution is the acquisition of SVB by bigger players. We’ll see. Given all the concerns and potential risks involved,  we have to be careful.  Many people’s reliance on stablecoins has already been compromised, causing panic among investors. Both USDC and DAI have been impacted.

Where to short USDC? 

For those who believe that USDC will indeed fall or de-peg, may consider shorting USDC. A reliable centralized exchange where this can be done is Bybit. Using Bybit futures, you can short USDC by selling the USDC/USDT contract.

How to short USD Circle – USDC?

Follow this step-by-step guide on how to short USDC on Bybit:

1. Create an account on Bybit or Log in to the platform.
2. Go to derivatives markets: To short USDC, you need to go to the derivatives markets of Bybit. To do this, click on the “Derivatives” tab at the top of the screen.
3. Select USDT derivatives: Once you are in the derivatives markets, select the USDT derivatives. This will show you all the markets that are paired with USDT.
4. Find USDCUSDT futures market: Next, you need to find the USDCUSDT futures market. You can do this by searching for it in the search bar or by scrolling down the list of markets until you find it.
5. Click through to the market: Once you have found the USDCUSDT futures market, click through to it to see the trading interface.
6. Choose amount of USDT: To short USDC, you need to have USDT. Choose the amount of USDT you want to short with.
7. Select leverage: Be careful to select your leverage before you enter a trade! Always consider your risk and follow a set of rules that you set up BEFORE the trade! Select your desired leverage from the options available.
8. Enter trade: Once you have selected your amount and leverage, enter your trade by clicking on the “Sell/Short” button. Your trade will then be executed, and you will have successfully shorted USDC.

Remember to always consider your risk and follow a set of rules that you set up BEFORE the trade. This contains an exit plan, where you take either profit or take a loss. 

Shorting on futures markets can involve leverage, so caution is advised, while higher gains can be made, higher losses are also possible.

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