Terra (LUNA) is storming higher towards market supremacy in the realm of stablecoins, as investors tend to believe that its algorithmic stability mechanism is long-term feasible.
Its crypto-reserve provides investors with a greater margin of safety, which is always a positive indication. More stability is better than less stability, particularly in light of the recent high volatility.
Terra’s token seems to be in great demand among investors and individuals looking for a reliable cryptocurrency on which to operate their businesses. Increased demand for this token is expected to increase LUNA’s market position overall.
Terra recently overtook Ethereum as the second-largest DeFi protocol, with approximately $18 billion in total value locked, according to data provider DeFi Llama.
The revelation that Terra’s stablecoin, which is TerraUSD (UST), will be backed by a $1 billion Bitcoin reserve is another critical cause for Terra’s fast growth and value gains. Many cryptocurrency holders are now optimistic about LUNA’s growth because of this statement.
TerraUSD (UST), an Ethereum-based stablecoin, is expected to maintain its value at $1.00. The TerraUSD reserve asset must be burnt for each TerraUSD currency.
Outperforming DOGE & Ether
Unlike other centrally backed stablecoins, LUNA does not have a monetary support and is instead connected to the US dollar via the minting and burning of tokens, which may limit bearish rates and hence preserve token value.
Within the past 24 hours, the digital token has outperformed widely known cryptocurrencies such as Ether and Dogecoin in terms of price and stability rates.
Terra’s entire market capitalization soared to $33.6 billion on the heels of a strong surge in prices, overtaking huge brands like Solano and Cardano to become the seventh-largest crypto brand in the market today.
LUNA total market cap at $36.81 billion in the daily chart | Source: TradingView.com
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Terra (LUNA) Price Update
LUNA is now trading at $92.55, with 24-hour highs of $96.31 and lows of $89.26. It has a market value of $34.5 billion and may reach $72.2 billion if entirely diluted. With a token supply of more than $370 billion, its current volume is expected to exceed $4 billion.
High Hopes For Terra
According to Matt Hougan, chief investment officer of Bitwise Asset Management, LUNA has been on an “absolutely spectacular run, it has been mostly impervious to recent market turmoil, falling less and recovering faster than its competitors.”
Meanwhile, LUNA might hit $98 by the end of March this year, some analysts said.
“Terra is hot among the cool kids in crypto right now,” Hougan said, adding that people “love the team behind Terra, and they love all the various applications being built on it right now.”
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Featured image from Cripto Pato, chart from TradingView.com