USDC holders may be diversifying into DAI to avoid US bank risk
There is so much demand for DAI on Coinbase right now, but what is really surprising is the volume on DAI/USDC.
I don't believe I have ever seen a daily trading volume on DAI/USDC to ever go past $2 million, let alone $10 million.
While DAI and USDC are both considered stablecoins, they are different in that one is backed by actual dollars sitting in a US bank account, while the other (DAI) is backed by ethereum deposits in MakerDAO vaults. In a financial crisis scenario, the dollars backing USDC could theoretically become blocked/seized if the holding bank becomes insolvent for whatever reason.
Given that US stocks suffered the biggest one-day crash in history today, it's no surprise that many USDC holders could be diversifying into DAI to protect against bank insolvency.
DAI usually trades around the $1 line, but today it has consistently traded above $1. This tells me the demand is strong that even arbitragers can't keep the peg at $1 for very long.
