UST has skyrocketed over the past 24 hours. The coin is getting closer and closer to regaining its dollar peg. The surge comes as Terra prepares for a reboot. The project is planning a major airdrop over the coming days. Here are some pointers:

• UST had crashed nearly 90% against the dollar after it de-pegged

• The coin has recovered and is around $0.8 on the dollar

• However, UST continues to experience massive volatility for a stablecoin.

Data Source: TradingView 

Will UST regain its peg?

Well, it is possible in fact, based on the recovery we have seen over the last two weeks, it won’t be a surprise if the stablecoin finally does it. But that’s not really the most critical point. Stablecoins are supposed to be “stable”. However, the kind of volatility we have seen in UST is just massive. 

Even if the coin was to hit the $1 mark, it is likely to keep falling up and down for the foreseeable future. This will likely keep investors away. Also, this intermittent surge is probably driven by short-term buyers. These are typically investors who are trying to cash in on the latest Terra reboot. They will obviously take their profits, and UST will crash again. 

So, while there is a real path for UST to hit $1, staying there will be an uphill task. Even if Terra manages to reboot successfully, restoring investor confidence in UST will be very hard in the near term.

How to trade UST?

The best way to trade UST is to focus on short-term volatility. There will be opportunities to buy dips and cash out. As of now, the coin is rallying and could get very close to the $1 mark. 

When it does, short it. But good luck finding exchanges that are willing to process that trade. Do not hold UST for the long term unless it consolidates at $1 for a few weeks.

Before its crash a week ago, Terra’s UST was one of the biggest dollar-pegged stablecoins in the market. The coin was finally de-pegged and has since lost almost 90% of its value against the dollar. So, it is obvious that crypto investors are looking for alternatives, and here is why.

• USD linked stablecoins are crucial for most crypto-related transactions.

• Stablecoins also help investors to reduce exposure to other volatile crypto assets.

• USD-linked stablecoins are the main drivers of DeFi.

With this in mind, if you are looking for better alternatives to UST, we have a list of three coins below to check out.

Tether (USDT)

When it comes to dollar-linked stablecoins, nothing compares to USDT. It is the biggest dollar-pegged coin by market cap and one of the more trusted options. 

Data Source: TradingView 

There were some fears after the UST collapse that Tether could lose its peg. But those fears have now been quashed. USDT appears as stable as ever. While the coin is not 100% safe, it is a far better option compared to most of the dollar-pegged coins in crypto right now.

USD Coin (USDC)

USD Coin (USDC) has an overall market cap of around $53 billion. After Tether, it is the second-largest dollar-pegged stablecoin. USDC has shown incredible stability over the last few weeks. 

Even as Tether and other stablecoins appeared to shake slightly in the wake of the UST collapse, USDC remained largely unchanged. It’s therefore a safe option for investors keen on using dollar-pegged coins. Besides, the circulation of USDC is backed by real currencies held in reserve and additional US treasury bonds.

Pax Dollar (USDP)

Pax Dollar (USDP) may not be as big as Tether or USD Coin, but it is a very decent stablecoin. Its market cap is slightly below $1 billion, but that’s not a bad thing. Besides, USDP is fully collateralized. This gives it a bit of extra stability.

The last four days have been quite eventful in the crypto market. The news has been dominated by the Terra (LUNA) crash after its UST stablecoin lost its peg with the US dollar. But it appears Tether (USDT), the largest dollar-pegged stablecoin is also feeling the heat. Here are the main points:

• Recent data shows that Tether is facing increased liquidation triggered by the broader crypto crash

• USDT has lost its value against the dollar by around 4.8% in the last 24 hours

• This is the lowest Tether has been over the last 5 years

Data Source: Tradingview 

Will Tether (USDT) follow the UST crash?

Tether (USDT) is the biggest dollar-pegged stablecoin in the world. It has a market cap of around $81 billion. It may seem like it’s too big to fail, but nothing is guaranteed in crypto. After Terra’s UST lost its peg against the dollar, the catastrophic fallout had a huge systematic impact on the entire market. 

UST has somewhat recovered and is now trading at 60 cents on the dollar. But it’s very hard to ignore recent developments. For example, the UST crash may have dented investor confidence in dollar-pegged stablecoins including Tether. Also, USDT has fallen by around 4.8% against the dollar. 

At one point during trading in the last 24 hours, the stablecoin hit the lowest level against the dollar in 5 years. As the market continues to crash, investors are likely to pull out their USDT holdings and this could have massive effects on the Tether peg.

Should you be worried?

Well, it’s not the first time the crypto market has crashed. So, even though there is a lot of pain across the board, a recovery will soon come.

However, the downside risks associated with Tether are building, and it will not be a surprise if the stablecoin loses its 1:1 dollar peg in the near term.

Original Source: https://zycrypto.com/cardano-set-to-onboard-game-changing-algorithmic-stablecoins-rivaling…

Disclaimer: Cardano Feed is a Decentralized News Aggregator that enables journalists, influencers, editors, publishers, websites and community members to share news about the Cardano Ecosystem. User must always do their own research and none of those articles are financial advices. The content is for informational purposes only and does not necessarily reflect our opinion.

Terra’s US dollar-pegged algorithmic cryptocurrency UST is moving up the ladder and now ranks third in terms of overall market capitalization.

Today, the fast-growing Terra USD (UST) stablecoin from the Terra ecosystem passed another pivotal point, reaching a market valuation of more over $17 billion.

As of Tuesday, UST had eclipsed the BSC-based stablecoin BUSD in market capitalization by more than $67 million.

UST was operations in September 2020. To mint an equivalent amount of UST, a user must burn a reserve asset such as Terra (LUNA).

UST Making Headlines

This year, the Terra blockchain network has been the talk of the crypto world. Following its participation in the broader market downturn over the weekend, Terra’s native cryptocurrency LUNA has had the highest 24-hour bounce.

Terra (LUNA) is currently trading 15% higher at $90, with a market valuation of $32 billion. Terra has surpassed Cardano’s ADA to become the eighth-largest cryptocurrency by market cap as a result of this development.

As of this writing, the leading stablecoin is Tether (USDT), which has a market cap of $82 billion. USD Coin (USDC) is ranked second with a market cap of nearly $50 billion.

Suggested Reading | Terra (LUNA) Outperforms Popular Cryptos Ether, Dogecoin In The Past 24 Hours

LUNA total market cap at $31.10 billion on the daily chart | Source: TradingView.com

UST is formed by burning a single terra (LUNA), the Terra network’s original crypto currency.

Other sorts of decentralized stablecoin projects, such as Makerdao’s DAI, rely on an over-collateralization procedure to maintain the token’s peg to the dollar.

The value of Terra’s stablecoin UST has increased exponentially during the last 509 days, or 16 months.

Additionally, recent data indicates that UST has been on a stratospheric rise since mid-November, with the market cap jumping by 525 percent.

Lower Trade Volume

Despite outperforming BUSD in terms of market capitalization, UST trades at a far lower volume compared to its immediate competition, with Binance’s stablecoin witnessing $2.25 billion in trading volume over the last 24 hours compared to UST’s $431.78 million.

On the other hand, Terra has recently made headlines for its Bitcoin acquisition. The Luna Foundation Guard (LFG), its parent organization, has acquired approximately 30,000 BTC to act as a peg and reserve for its UST stablecoin.

But, it has a lot going on behind the scenes. LFG intends to acquire a total of 410 billion dollars’ worth of Bitcoin.

However, similar to the broader crypto market in recent months, bullish pronouncements are doing nothing to boost the price of LUNA.

The token’s price has fallen 12.5% in the last 30 days to $77.30, and it has also retreated 34.3 percent since reaching an all-time high of $119.18 on April 5.

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Terra’s UST has become the third largest stablecoin by market cap, flipping Binance USD (BUSD).

With a market cap of $17.5 billion, it is close to surpassing Dogecoin, the largest meme coin.

Terra, a smart contract platform that competes with Ethereum and other similar blockchain platforms, has been making plenty of headlines over the past month because of the Luna Foundation Guard (LFG) nonprofit.

The LFG has built a massive Bitcoin reserve in order to maintain the stability of the UST cryptocurrency, which is supposed to maintain the U.S. dollar peg.

Tether (USDT) and USD Coin (USDC) remain the two biggest stablecoins by market capitalization. They are worth $85.7 billion and $50 billion, respectively. These stablecoins rely on centralized entities to maintain their peg. UST is an algorithmic stablecoin, which means that its price gets stabilized with the help of an algorithm powered by a smart contract.

Terra presents arbitrage opportunities for its users by allowing them to burn LUNA governance tokens in order to dilute the supply of the UST stablecoin and keep its price strictly at $1. Alternatively, it is also possible to make a profit by exchanging UST tokens for LUNA, thus preventing the former from losing its peg.

 As reported by U.Today, the LFG acquired another $105 million worth of Bitcoin last week. Ultimately, Terra plans to hold and buy $10 billion in Bitcoin. At press time, the address associated with the nonprofit holds $1.65 billion worth of the flagship cryptocurrency.

There has been fast growth in the stablecoin economy, with a recent total of $187 billion, which is quite near the $200 billion thresholds.

Stablecoins like Terra’s UST and Neutrino Protocol’s USDN are gaining popularity even as Tether remains the most widely used.

They experienced a nearly 30% and a 44% rise in issuance in the previous month, respectively. In other words, if this trend continues, it will easily surpass $200 billion in the following months.

Stablecoins Strong USD Backing

Compared to other digital currencies, stablecoins are designed to be precisely that: stable.

Some coins are tied to the US dollar, implying that each one is fully backed by a dollar’s worth of cash, Treasury securities, or other secure assets and may thus be redeemed at will.

A tenth of all digital assets, including cryptocurrencies, are represented by these tokens.

UST total market cap at $14.68 billion on the daily chart | Source: TradingView.com

Related Article | Apple Co-Founder Steve Wozniak ‘Feels’ Bitcoin Will Be Worth $100,000

Tether At $80 Billion

The largest stablecoin by market value, Tether has had its supply rise by 2% in the previous month and now stands at over $80 billion.

The stablecoin market is dominated by USDT, with a 43.78% share. Furthermore, it is the third-largest cryptocurrency, behind Bitcoin and Ethereum, in terms of market valuation.

Following Tether, we have USDC or the USD coin, which has a market capitalization of $52.5 billion, making it a significant part of the total market.

Tether accounts for 28% of the stablecoin economy and is the fifth-largest cryptocurrency after Binance Coin (BNB), which is ranked fourth.

Stablecoins Advancing

Investors have great expectations for Terra’s UST, one of the fastest-growing stablecoins, and the Luna and UST projects as well. Market capitalization is currently $14.7 billion, up nearly 30% in the previous month.

USDC frequently trades with Tether, accounting for 65% of Monday’s tether swaps. Tether is followed by BUSD, USD, EUR, and WETH as the top pairs trading with USDC.

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While USDT and USDC saw no significant increases in the last month, UST, FRAX, and USDN were up in their 30-day issuance rates.

Terra’s UST increased by nearly 30%, and the stablecoin now has a market capitalization of approximately $15 billion.

More Room For Growth

Last month, FRAX, the first fractional-algorithmic stablecoin protocol, saw its 30-day issuance rate increase by 9.5%, and Neutrino Protocol’s USDN climbed by 44%.

Stablecoins Facilitate Faster Trading

Meanwhile, Stablecoins Like UST and USDN is primarily used today to facilitate trading other, more volatile digital assets, such as Bitcoin.

However, companies around the world are working to develop stablecoins that businesses and households can use to conduct transactions, which could help make the payment system faster, more resilient, and more inclusive.

Featured image from Bitcoin News, chart from TradingView.com

Nexo (NEXO) has continued its upward climb seen over the last few days. This comes as the platform announced the launch of TerraUSD (UST) on its platform. As details of this new development start to reach a wider audience, it is likely that NEXO will surge even further in the coming days. Here are some highlights:

• The new launch will allow users to now borrow, lend, or stake UST on the Nexo platform with ease.

• At press time, NEXO was trading at $2.26, up by around 5% in 24 hours and nearly 15% over the last week.

• Users will also get to enjoy double yield rewards on UST staking until March 31 with a 20% APR to follow after.

Data Source: Tradingview 

Nexo (NEXO) – Price analysis and prediction

Like many assets in the crypto market, Nexo (NEXO) has been climbing upwards after a torrid start to 2022. At press time, the coin was trading at around $2.26, up by nearly 15% over the last 7 days. 

Since the UST news is just breaking, it’s unlikely that it is baked into the current surge. In fact, once investors start to learn of these new developments, NEXO will surge even further. 

Nonetheless, the coin is still lower than its all-time high of $4. But the upward trajectory we are seeing at the moment could in fact take it towards that threshold.

Is Nexo (NEXO) worth the risk?

Crypto lending is a risky area but despite this, it has actually been growing quite fast over the last few years. There are still many other innovative DeFi projects that are trying to conquer this market. 

Nexo is one of them and so far, it seems like the project is doing a lot behind the scenes to deliver value for investors. For a long-term bet, there is no doubt Nexo is a decent asset.

 UST and DAI are two stablecoins backed by other cryptocurrencies. Unlike other stablecoins, they are decentralized. Stablecoins are cryptocurrencies that maintain a stable price by being tied to another asset; crypto or fiat. They are less volatile than other cryptocurrencies.

 DAI was launched in 2017 by MakerDAO and was built on the Ethereum blockchain. It has the stability of a stablecoin and is as secure as the Ethereum platform. Its stability is maintained by collateralizing it with ETH in a smart contract algorithm. It helps secure and power the Maker network on which it is generated and traded.

 UST was launched in September 2020 by Terraform Labs. It is stabilized with the aid of a smart contract algorithm and an elastic money supply mechanism. New USTs are minted through a process called seigniorage. It is collateralized by LUNA- Terra’s native coin.

 Both stablecoins are decentralized as they have no central authority like the other popular stablecoins. Similarly, they are pegged to cryptocurrencies rather than fiat currencies. They use smart contract algorithms to maintain stable prices.

 In minting DAI, the collateral (ETH) must be way more than the amount of DAI to be minted. UST, on the other hand, needs an equivalent of LUNA in USD to mint the same amount. In doing this, a percentage of the LUNA is burnt, and another is reserved for the community treasury. The more UST is demanded, the more the appropriate amount of LUNA is burnt.

 The smart contract algorithm used for stabilizing UST can generate UST and maintain itself. However, high volatility with ETH can affect the stability of DAI. Also, the market caps and trading volumes of these assets indicate that UST is adopted over DAI.

 This might be due to UST’s arbitrage system that helps it automatically maintain supply when it is below peg. Right now, the Anchor protocol has made it possible to earn an APY of about 20% when UST is lent out. If you are looking to invest in a decentralized stablecoin, UST is the better investment.

 In the crypto space, everything is volatile no matter how stable it seems. Thus, deal wisely and do your research. Don’t invest beyond what you can’t afford to lose.