Coinbase’s Trading Volume Plummeted by 99.2% Due to Bankruptcy of Silicon Valley Banks

03/12/2023 05:25 • Metaverse Matters • 81 views

On March 12, according to the data released by Crypto KOL and chain analyst Mr. Whale, the trading volume of Coinbase on the Cryptocurrency Exchange has plunged by 99.2% in the past 24 hours, which is the first time in history. The reason may be that the US dollar stable currency (USDC) (partially owned by Coinbase) triggered the anchoring in the bankruptcy of Silicon Valley banks.

Coinbase’s trading volume fell 99.2% in the past 24 hours

Analysis based on this information:

Coinbase, one of the world’s largest cryptocurrency exchanges, experienced a significant drop in its trading volume by 99.2% on March 12th. According to data released by Crypto KOL and chain analyst Mr. Whale, it is believed to be the first time in the company’s history that such a dramatic dip has occurred. The reason behind this sudden plummet is believed to be related to the bankruptcy of several Silicon Valley banks and their links to US dollar stable currency (USDC), which is partially owned by Coinbase.

USDC is a type of digital currency that is backed by the US dollar. It is used by many cryptocurrency exchanges as a means of easily converting cryptocurrency to fiat currency, making it an essential component of the cryptocurrency ecosystem. When a Silicon Valley bank invoked its right to convert its USDC into US dollars because of its bankruptcy, it triggered an anchoring effect that caused Coinbase’s trading volume to drop nearly to zero.

The incident highlights the potential downsides of relying too heavily on stable digital currencies in the cryptocurrency market, which is often touted as a decentralized and highly secure platform. It also raises important questions about the potential for interconnection and contagion between the digital currency world and the traditional banking system.

The sudden plunge in Coinbase’s trading volume highlights the significant impact that external factors can have on the cryptocurrency market, and demonstrates the need for continued regulation and oversight to ensure the long-term stability and viability of this emerging industry. It also highlights the importance of credit risk management in the field of digital currency trading, which should be incorporated into the risk management framework of cryptocurrency exchanges.

In conclusion, the bankruptcy of several Silicon Valley banks has caused an unprecedented drop in Coinbase’s trading volume, revealing potential challenges related to the use of stable digital currencies in the cryptocurrency market. While the industry continues to evolve and mature, it is essential that the risks and challenges of digital currency trading are fully understood and managed to ensure a stable and sustainable future for the cryptocurrency revolution.

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Coinbase’s Trading Volume Plummeted by 99.2% Due to Bankruptcy of Silicon Valley Banks

Coinbase’s trading volume fell 99.2% in the past 24 hours

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