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USDC’s Sticky Nature Impacts Crypto Market

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It is reported that Conor, the business director of Coinbase, tweeted that it is noteworthy that a large part of USDCs are sticky and will not/cannot be redeeme

USDCs Sticky Nature Impacts Crypto Market

It is reported that Conor, the business director of Coinbase, tweeted that it is noteworthy that a large part of USDCs are sticky and will not/cannot be redeemed immediately. For example, USDC with US $8.1 million is in the blacklist wallet. 10 million USDC is likely to be lost forever, and more than 200 million USD has been locked in FTX assets for many years. Hundreds of millions of funds are locked in the bankruptcy property with slow flow (15 million for Blockfi and 463 million for Voyager). Hundreds of millions of funds are locked in the slow flowing DAO/fund. For example, 2.42 million of the Covid relief fund in India (the fund has no flow in more than 12 months). The 9-10-digit USDC in the financial wallet of centralized enterprises.

Business director of Coinbase: A large part of USDCs will not be redeemed immediately

Analysis based on this information:


Conor, the business director of Coinbase, has recently tweeted about the peculiar nature of USDC (USD Coin) – a stablecoin popular among cryptocurrency traders. According to the tweet, a significant portion of USDCs in circulation has become sticky, meaning that it cannot be redeemed immediately. This is a cause for concern for traders and investors alike as it affects price stability and liquidity in the crypto market.

Conor’s tweet highlights some significant examples of stickiness. For instance, US $8.1 million is believed to be in the blacklist wallet, rendering it irredeemable. Similarly, 10 million USDC is likely to be lost forever, and over 200 million USD has been locked in FTX assets for years. This situation is further compounded by hundreds of millions of funds locked in bankruptcy properties, like Blockfi (15 million) and Voyager (463 million). Additionally, hundreds of millions more funds are locked in the slow-flowing DAO/funds, including 2.42 million of the Covid relief fund in India, which has not had any flow for over 12 months. Finally, conglomerates have billions of USDC in their financial wallets, which can cause an imbalance in the already fragmented crypto market.

One of the reasons for USDC’s stickiness is its ailing financial ecosystem, which impacts its liquidity. Stablecoins are pegged to fiat currencies like the US dollar, and USDC’s issuer, Circle, claims that they are backed by reserves held in traditional bank accounts. However, the recent crackdown by regulators on unregulated stablecoin issuers has resulted in USDC becoming sticky. As the crypto market lacks a formal regulatory body, the redemption process remains vague, and traders end up trading among themselves. USDC’s stickiness could also be attributed to the absence of an effective decentralized exchange that can offer a reliable exit to redeem USDC.

In conclusion, USDC’s sticky nature is a sign of the fragility of the crypto market. It is an indicator of the regulatory uncertainty that affects the digital asset ecosystem worldwide, and its impact could reverberate beyond the crypto community. Unless an aggressive and collective initiative exists to address this issue, the crypto market will remain fragmented and susceptible to market manipulation. Meanwhile, traders must be cautious while dealing with sticky funds and understand the nuances of stablecoins before investing their assets.

Overall, the keywords that sum up the message are USDC, redemption, stickiness, financial wallets, and slow flow, which denote the prevalent issues related to USDC and its impact on the crypto market.

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