Crypto users flock to DEXs after SVB Breakdown: Sequence Analysis

  • The collapse of SVB and other banks prompted users to turn to DEXs.
  • Recent banking failures threaten liquidity between digital currencies and cryptocurrencies.
  • Crypto users have turned to DEXs like Curve Finance and Uniswap to acquire other assets amid the chaos.

The recent collapse of three crypto-friendly banks, including SVB, has investors worried about their ability to exit the market. Cancellation of cryptocurrency banking transactions It could have serious implications for the industry. To address this issue, investors have flocked to decentralized exchanges (DEXs).

report from decomposition I looked at the The collapse of the Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank. The bank failures have significant implications for the cryptocurrency industry, the report, published on Tuesday, wrote.

Cryptocurrency traders dump CEX for DEXs after SVB crash

Silvergate and Signature were among the largest group of clients in the crypto space. Its collapse could make it difficult for crypto companies to enable crypto-to-cryptocurrency transactions. like USDC lost its currency peg Amidst the SVB crisis, cryptocurrencies panicked.

On-chain data showed that cryptocurrency investors have withdrawn billions of their holdings from centralized exchanges (CEXs), and flocked to DEXs.

Hourly outflows from centralized exchanges rose to $1.2 billion as of 1 a.m. on March 11, Chainalysis wrote. USDC and encapsulated Ether (wETH) have seen some of the largest trading volumes on DEXs at this time.

Traders have used DEXs such as Curve Finance and Uniswap to acquire other assets after the USDC depeg. Exchanges have seen a rise in users buying stablecoins such as USDT and DAI.

As more banking crises approach, liquidity in cryptocurrency markets may decrease. This is especially true after the collapse of two major cryptocurrency banks.

Chainalisys suggests that investors should look into over-the-counter (OTC) trading platforms. These platforms are executing large cash transactions in exchange for cryptocurrencies, which can show the impact of the crisis on cryptocurrencies.

on the flip side

  • Crypto-friendly banks aren’t the only ones who have run into trouble. newly, Credit SuisseHe, one of the largest banks in the world, requested a $54 billion loan to avert a liquidity crisis.
  • Increased adoption of DEXs can lead to further innovation and development in the decentralized finance (DeFi) sector.

Why should you bother

Bank failures underline the fragility of traditional financial systems and potential Benefits of decentralized alternatives.

Read about how crypto could be a solution to the banking crisis in the future:
Could crypto be the answer to the US banking meltdown as banks keep running?

Read about the recent panic at one of the world’s largest banks, and what it means for cryptocurrency:
Credit Suisse Panic: Key Crypto Takeaways

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