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>Did Circle and USDC trigger the sudden liquidity gap in SVP that triggered the fire sale of 21B at a loss? It seems unlikely that would be the case, 5.4B woul
by oarabbus_ 4y ago
>Did Circle and USDC trigger the sudden liquidity gap in SVP that triggered the fire sale of 21B at a loss?
It seems unlikely that would be the case, 5.4B would represent only 2.5% of their AUM at the time of failure. However the Fed did reduce the bank cash reserve requirement to 0% in March 2020, so it's technically in the realm of possibility... but having to sell off assets after a 2.5% drawdown is analogous to being 40x leveraged.
It would be unbelievably poor risk management if this were the case, and seems more likely a much larger event than a few crypto companies (which are small in the grand scheme of things) withdrawing deposits.