USDC Temporarily Depegs on Binance Amidst Crypto Market Sell-Off
In a surprising move that startled the cryptocurrency market, Circle's USDC dollar-pegged stablecoin momentarily depegged from its $1 value, falling as low as $0.76 on the Binance exchange platform. This incident occurred during a market-wide sell-off, which was spurred by skepticism over the potential approval of a spot bitcoin ETF this month.
Lack of Sufficient Liquidity Causes Depegging
This depegging is likely to be the result of a lack of sufficient liquidity when large sell orders were placed for USDC in exchange for USDT. The Binance 2% market depth for the USDC/USDT pair revealed a skew towards the upside, indicating that any sell order larger than the $6.1 million liquidity floor could force the price below its $0.98 usual fluctuation. The instability was also influenced by a $500 million liquidation in derivative positions following a report that speculated on the SEC's rejection of various spot bitcoin ETF applications.
Volatility of USDC and Its Impact on the Crypto Market
The volatility of USDC is particularly notable given its usual stability as a fiat currency-backed stablecoin, exchangeable at a 1:1 ratio with the US dollar. Such drops can cause ripples across the crypto market, affecting trust and perceived stability, although this time appears to be a contained event. This isn't the first time USDC has experienced a depeg; it notably traded down to $0.877 following the collapse of Silicon Valley Bank earlier in March 2023, a situation that arose due to a portion of its reserves being held at the beleaguered bank.
Other Exchanges Encounter Similar Depegging Issues
Binance was not alone in experiencing a depeg of the USDC stablecoin; Okx also encountered a similar issue, albeit to a lesser degree, with USDC dropping to $0.955. Interestingly, the depegging on Okx commenced earlier than on Binance, beginning at 12:01 and persisting until 12:21 UTC, contrasting with the three snap-back recoveries observed on Binance's platform.
What is your go-to stablecoin? Share your thoughts and opinions about this subject in the comments section below.
Frequently Asked Questions
Can I hold physical gold in my IRA?
Not only is gold paper currency, but it's also money. Gold is an asset people have used for thousands years as a place to store value and protect their wealth from economic uncertainty and inflation. Today, investors invest in gold as part a diversified portfolio. This is because gold tends do better in financial turmoil.
Many Americans are now more inclined to invest in precious metals like gold and silver than stocks or bonds. It is possible to make money by investing in gold. However, it doesn't guarantee that you'll make a lot of money.
Another reason is the fact that gold historically has performed better than other assets in times of financial panic. The S&P 500 dropped 21 percent in the same time period, while gold prices rose by nearly 100 percent between August 2011-early 2013. During these turbulent market times, gold was among few assets that outperformed the stocks.
The best thing about gold investing is the fact that there's virtually no counterparty risk. Your stock portfolio can fall, but you will still own your shares. However, if you have gold, your value will rise even if the company that you invested in defaults on its loans.
Finally, gold offers liquidity. This means that, unlike most other investments, you can sell your gold anytime without worrying about finding another buyer. Gold is liquid and therefore it makes sense to purchase small amounts. This allows you to profit from short-term fluctuations on the gold market.
Who owns the gold in a Gold IRA?
The IRS considers an individual who owns gold as holding “a form of money” subject to taxation.
To be eligible for the tax-free status, you must possess at least $10,000 gold and have had it stored for at least five consecutive years.
Gold can be used to protect against inflation and price volatility. However, it is not a good idea to own gold if you don't intend to use it.
If you are planning to sell your gold someday, it is necessary that you report its value. This can affect the capital gains taxes that you owe when cashing in on investments.
To find out what options you have, consult an accountant or financial planner.
What Is a Precious Metal IRA?
An IRA with precious metals allows you to diversify retirement savings into gold and silver, palladium, rhodiums, iridiums, osmium, or other rare metals. These metals are known as “precious” because they are rare and extremely valuable. They make excellent investments for your money and help you protect your future from inflation and economic instability.
Precious metals are often referred to as “bullion.” Bullion refers simply to the physical metal.
Bullion can be purchased through many channels including online retailers and large coin dealers as well as some grocery stores.
An IRA for precious metals allows you to directly invest in bullion instead of purchasing stock shares. This allows you to receive dividends every year.
Precious metal IRAs are not like regular IRAs. They don't need paperwork and don't have to be renewed annually. Instead, you only pay a small percentage on your gains. Plus, you can access your funds whenever you like.
Can the government take your gold
Your gold is yours, so the government cannot confiscate it. It's yours, and you earned it by working hard. It belongs entirely to you. This rule could be broken by exceptions. If you are convicted of fraud against the federal government, your gold can be forfeit. If you owe taxes, your precious metals could be taken away. You can keep your gold even if your taxes are not paid.
What Should Your IRA Include in Precious Metals?
It's important to understand that precious metals aren't only for wealthy people. They don't require you to be wealthy to invest in them. There are many ways that you can make money with gold and silver investments, even if you don't have much money.
You might consider purchasing physical coins, such as bullion bars and rounds. Shares in precious metals-producing companies could be an option. Your retirement plan provider may offer an IRA rollingover program.
No matter what your preference, precious metals will still be of benefit to you. Even though they aren't stocks, they still offer the possibility of long-term growth.
And, unlike traditional investments, their prices tend to rise over time. You'll probably make more money if your investment is sold down the line than traditional investments.
What should I pay into my Roth IRA
Roth IRAs let you save tax on retirement by allowing you to deposit your own money. These accounts are not allowed to be withdrawn before the age of 59 1/2. There are some rules that you need to keep in mind if you want to withdraw funds from these accounts before you reach 59 1/2. First, you cannot touch your principal (the original amount deposited). No matter how much money you contribute, you cannot take out more than was originally deposited to the account. You must pay taxes on the difference if you want to take out more than what you initially contributed.
The second rule is that your earnings cannot be withheld without income tax. When you withdraw, you will have to pay income tax. For example, let's say that you contribute $5,000 to your Roth IRA every year. Let's also say that you earn $10,000 per annum after contributing. This would mean that you would have to pay $3,500 in federal income tax. You would have $6,500 less. The amount you can withdraw is limited to the original contribution.
The $4,000 you take out of your earnings would be subject to taxes. You'd still owe $1,500 in taxes. Additionally, half of your earnings would be lost because they will be taxed at 50% (half the 40%). So even though you received $7,000 in Roth IRA contributions, you only received $4,000.
There are two types if Roth IRAs, Roth and Traditional. Traditional IRAs allow for pre-tax deductions from your taxable earnings. When you retire, you can use your traditional IRA to withdraw your contribution balance plus interest. A traditional IRA can be withdrawn up to the maximum amount allowed.
Roth IRAs don't allow you deduct contributions. However, once you retire, you can withdraw your entire contribution plus accrued interest. Unlike a traditional IRA, there is no minimum withdrawal requirement. You don't have to wait until you turn 70 1/2 years old before withdrawing your contribution.
Statistics
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
External Links
finance.yahoo.com
irs.gov
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 1991 – WSJ
- Are you interested in keeping gold in your IRA at-home? It's Not Exactly Legal – WSJ
bbb.org
How To
A growing trend: Gold IRAs
As investors seek to diversify their portfolios while protecting themselves from inflation, the trend towards gold IRAs is on the rise.
The gold IRA allows investors to purchase physical gold bars and bullion. It is a tax-free investment that can be used to grow wealth and offers an alternative investment option to those who are concerned about stocks or bonds.
A gold IRA allows investors the freedom to manage their wealth without worrying about volatility in the markets. The gold IRA can be used to protect against inflation or other potential problems.
Investors also have the benefit of physical gold, which has unique properties such durability, portability and divisibility.
Additionally, the gold IRA has many benefits. It allows you to quickly transfer your gold ownership to your heirs. The IRS doesn't consider gold a commodity or currency.
All this means that the gold IRA is becoming increasingly popular among investors seeking a haven during financial uncertainty.
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By: David Sencil
Title: USDC Stablecoin Temporarily Depegs to $0.76 on Binance Amid Market Turbulence
Sourced From: news.bitcoin.com/usdc-stablecoin-temporarily-depegs-to-0-76-on-binance-amid-market-turbulence/
Published Date: Thu, 04 Jan 2024 14:30:31 +0000
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