New data from Arkham Intelligence has revealed that $2.2 billion worth of USDC stablecoin was burnt in a single day, making it the largest token burn in a day.
According to the available data, more than $700 million worth of USDC was burnt in the early hours of Wednesday while further checks show several other USDC burns were recorded in multiple separate processes on the same day. This ranges from $300 million to $600 million, bringing the total burnt value to $2.2 billion.
Investors King understands that to burn a token is to send the said token to an inaccessible wallet called the burn wallet and permanently remove it from circulation.
For USDC stablecoin, this development is coming a few days after it dipped below its $1 pegged value on Friday to $0.87 shortly after Silicon Valley Bank (SVB) was shut down. This was because Circle, the issuer of USDC stablecoin, had $3.3 billion worth of treasury assets in the reserves of collapsed SVB.
USDC later regained its lost ground against the United States Dollar after Circle announced it could access the $3.3 billion stuck in SVB and now has a new banking partner in Cross River Bank.
Still, the uncertainty associated with risky assets remained elevated as central banks continue to raise interest rates to manage rising inflation, which has subsequently increased the cost of living and eroded companies’ profitability.
The decline in profitability and heightened risk level have impeded capital inflow into the cryptocurrency space, especially after a series of catastrophes recorded in recent months.
However, institutional investors are expected to return to the space towards the end of 2023 — ahead of Bitcoin halving expected to bolster bitcoin to over $66,000 a coin in the 2024/25 financial year.
Meanwhile, Circle had said it was ramping up ties with the Bank of New York (BNY) Mellon regarding its $9.7 billion cash held with the bank.