Terra’s classic stablecoin surges on BUSD failure, but is still only worth $0.03
The algorithmic USD stablecoin saw gains of 19% today.
The depegged stablecoin Terra Classic USD (USTC) regained a small amount of value today alongside news that issuance of Binance USD (BUSD) will be halted.
The price of USTC rose 19.14% to 3.1 cents over 24 hours on Feb. 13. For the past several months (until Feb. 3) it has been worth 2.7 cents or less.
USTC’s earlier gains may be due to a planned protocol upgrade set for Feb. 14 or due to hype around Cardano’s competing algorithmic stablecoin.
However, today’s gains seem to be partially due to Binance USD’s failure, which has caused a loss of confidence in centrally backed stablecoins among some investors. As such, confident investors may be motivated to invest in decentralized stablecoins — specifically those that have lost their peg and therefore have a chance of partial recovery.
That trend is supported by gains seen in other decentralized stablecoins, which can be algorithmic or overcollateralized by crypto. Neutrino USD is up 13.11% to $0.20, USDX [Kava] is up 0.78% to $0.84, and VAI is up 1.96% to $0.97.
Though USTC’s gains today are the highest in that category, its minor growth is insufficient to allow it to reclaim its former $1.00 price peg — a level it has not seen since the Terra project collapsed in May 2022. Furthermore, USTC is no longer associated with the revived Terra project, which does not use a stablecoin as a core feature.
Still, today’s gains may provide enough room for holders to earn on their investments.