Circle’s USDC stablecoin, which is pegged to the US dollar, experienced a brief dip below $1 on three separate occasions today. The sell-off was triggered by a report suggesting that the Securities and Exchange Commission (SEC) might not approve a spot bitcoin exchange-traded fund (ETF) this month.

USDC Price Fluctuations

Between 12:10 and 12:21 UTC, USDC plunged to as low as $0.74, $0.80, and $0.79 against its tether (USDT) trading pair on Binance. The price quickly recovered to $1 on all three occasions.

What is a Stablecoin?

A stablecoin is a cryptocurrency pegged to the value of a stable asset, such as the US dollar. This makes it less volatile than other cryptocurrencies.

This type of price fluctuation can occur when a trader sells a large amount of USDC for USDT and there is not enough liquidity to maintain the $1 peg.

Market Depth and Liquidity

The 2% market depth on Binance for the USDC/USDT pair is skewed to the upside, with more orders stacked above $1 than below. This means that a sell order larger than $6.1 million could cause the price to drop below $0.98.

There was a significant volume of trades at 12:10 and 12:21 UTC, totaling over $10 million.

Derivative Positions

The price drop was also influenced by the liquidation of over $500 million in derivative positions following a report by Matrixport, which anticipated the SEC rejecting spot bitcoin ETF applications this month.

Previous Depegging Events

It’s worth noting that the USDC/USDT trading pair has experienced minor depegs in the past, but none as significant as today’s fluctuations.

The most recent depegging occurred in March 2023, when USDC traded at $0.86 after the collapse of Silicon Valley Bank. Circle, the issuer of USDC, held some of the stablecoin’s backing funds at the troubled bank.


Today’s price fluctuations highlight the importance of liquidity and market depth in maintaining stablecoin pegs. While USDC has generally held its $1 peg well, it can be susceptible to temporary dips during periods of high volatility or low liquidity.