“The liquidation of the USD coin (USDC) increases when volatility increases on the cryptocurrency market”
In a recent increase in liquidation, they have obtained maximum records for several cryptoms, including trading commercials and deposits on points to various exchanges. The most important market concerned is the USDC (the United States dollar), which recorded its value of over 15%compared to last week.
What are American coins (USDC)?
The USD (USDC) currency is a decentralized stablacoin designed to maintain a 1: 1 ratio with the US dollar. It started in August 2018 and was created as an alternative to other Stablein such as Tether and USDT (Tether token). The token value is linked to the US dollar, which is less volatile than other cryptocurrencies.
How do disposal work?
The liquidation occurs when the market or replacement in its reserves has a large imbalance, causing a decrease in the Stablacoin price, as a USD coin. In such cases, the owner of the reserves will sell its coin at the current market rate to restore the balance. This process is facilitated by exchanges that hold reserve goods on behalf of users.
Increase in liquidation
In recent weeks, several markets with cryptoms have seen an increase in liquidation events. The commercial company and deposits of points on the stock exchange on equity exchanges such as Binance, Kraken and Huobi have recorded significant disposal rates.
* Binance : Binance Exchange has recorded over 5,000 liquidation events per day in the last week.
* Kraken : Kraven’s bag recorded an increase in liquidation rates by over 30%last week.
* Huobi : Huobi has reported a significant increase in liquidation rates on its deposits on spots and platforms on spores spores.
Why do liquidations increase?
Several factors contribute to the increase in liquidation:
* High volatility : cryptoms have experienced an unprecedented level of volatility in recent months, leading to an increase in prices and subsequent liquidation events.
* Degidity of liquidity
: exchanges often try to maintain sufficient liquidity, causing the drop in prices and lead to liquidation events.
* Regulatory uncertainty : The current regulatory environment for the exchange of cryptocurrency has created uncertainty and investors led to find safer alternatives than the USD (USDC) currency.
Conclusion
The disposal of USD coins (USDC) has reached the maximum records, reflecting the shortcomings of volatility and liquidity of the market. While the market continues to float, it is necessary to remain informed on the latest developments and potential associated risks.
Note: The article is intended only for information purposes and must not be considered as an investment advice. Cryptoms are intrinsically unstable and prices can flow rapidly. Always conduct in -depth research before making any investment decision.
