I never understood why people say that the collapse of stable coins would hurt Bitcoin in the short term.
Because quite frankly people after daft. And they have short-term memory. That of UST de-pegging in 2022, not of USDT de-pegging in 2018 for example, and the clear difference of consequence.
For me it seems just logical that Bitcoin would go up in price. I mean where else should the money from a collapsing stablecoin market go?
At the moment it's flowing more into USDT (ironic I know) than Bitcoin, or even USD, although there was an initial spike in price due to USDC dumping for Bitcoin with high volume. Stop buys I imagine.
A part into fiat but the rest would go into the next stable and most secure coin, which is Bitcoin.
Not convinced it's as simple as that. When UST de-pegged, there was significant reserves in Bitcoin at the time - 40K if not mistaken. So when the reserves were liquidated, it did cause price to dump, as there was selling pressure (direct affect). Whereas when USDT de-pegged in October 2018, price spiked to the upside by 15% - it was a positive for Bitcoin - mainly as at the time there wasn't an alternative stablecoin.
So really I'd say it depends on the situation, mainly based on the collateral of stablecoin reserves and whether it's in Bitcoin or fiat. In this case, it's fiat reserves. So in summary, despite the short-term spike to the upside today, price is so far up +1%. What does this mean? Nothing happened basically, just another day of consolidation around $20K. Bitcoin remains unaffected.
To say this is positive for Bitcoin because price is up +1% is nonsense, likewise if price was down -1%. It's just completely irrelevant imo, at least at present with current situation. The irony being that USDC is short 8% on reserves due to SVB, and USDC price was down around 8% (now 5% I see) before buyers stepped in (
some big funds notably), so pretty much the "reserve loss" was priced in quite quickly.
Monday will end up being a dumb day if USDC price is <$1. Coinbase are planning to
resume redemption 1:1 of USDC for USD, once banks are open again, so arbitrage will play out of buying USDC under $1 and selling 1:1 for dollar until the price returns to parity. Despite all the doom and gloomers out there expecting USDC to go to zero, the likelihood hood (right now) of that happening is very low.
TL:DR: USDC de-pegging in this scenario isn't good or bad for Bitcoin, it's simply irrelevant.
But sure, we can always claim that the SVB is bearish for Bitcoin when price is so far completely unaffected by news. Then if price drops in the coming days, we can blame it on SVB
