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HomeCryptoTerra's Bitcoin-Backed Stablecoin Overtakes Binance USD

Terra’s Bitcoin-Backed Stablecoin Overtakes Binance USD

TerraUSD (UST), the so-called algorithmic stablecoin of the Terra (LUNA) network, has overtaken Binance USD (BUSD), the stablecoin of the Binance exchange. That means UST is now the third largest stablecoin on the market.

Stablecoins are cryptocurrencies whose value is linked to another currency or asset. For most stablecoins, that is the US dollar (USD). They are very popular in trading with more mainstream crypto and have grown rapidly in recent years.

Tether (USDT) has grown from a market capitalization of $6 billion to the current $83 billion in the past two years. Circle (USDC) rose from $0.7 billion to $50 billion in the same time. Binance USD (BUSD) rose from USD 0.2 billion to USD 17.4 billion.

TerraUSD (UST) only launched in September 2020 and now has a market cap of $17.5 billion. UST’s market cap was up 15% last month and a staggering 525% since November.

However, terraUSD’s trading volume is still far behind the competition. UST’s volume in the last 24 hours is $570 million, BUSD is $3.3 billion and USDC is $4.1 billion. USDT’s trading volume is a staggering $46.6 billion.

Terra Wants to Buy $10 Billion in Bitcoins

The Luna Foundation Guard (LFG), the non-profit organization behind UST, recently received 10 million LUNA tokens worth about $800 million from Terraform Labs (TFL), the company behind Terra.

This may be used in Terra’s plan to buy as much as $10 billion worth of bitcoin (BTC) in support of the UST stablecoin. The LFG now owns about $1.7 billion in BTC, which is even more than Tesla. Nevertheless, these large investments do not yet ensure that the bitcoin price rises. The fear and selling pressure are currently too high and the LUNA price is also falling sharply.

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