One of the hottest cryptocurrency projects is facing a major test amid market turmoil
The price of Terra (UST) has dropped by more than 30% in one day, according to data provided by CoinGecko.
The UST stablecoin has lost its peg, plunging to an intraday low of $0.932008. After attempting to recover, it keeps trading below the $0.94 level. Terra’s most popular stablecoin reached its current all-time low of $0.85 on May 19, 2021.UST is an algorithmic stablecoin, which means that it maintains its stability with the help of algorithms programming. The Luna Foundation Guard (LFG), a non-profit created by Terraform Labs,has emptied a Bitcoin wallet containing $1.4 billion in order to shore up the embattled stablecoin. It scrambled to issue loans in both Bitcoin and UST to over-the-counter trading firms. Last week, the LFG became Bitcoin's second-largest corporate holder (behind only business intelligence firm MicroStrategy).In addition, the Terra network has already started experiencing some broadcast delays per network congestion.UST has now surpassed its sister token by market capitalization. The two are valued at $17 billion and $15.9 billion, respectively.As reported by U.Today, the stablecoin also briefly lost its peg on Sunday, but the drop was less dramatic.
A massive sell-off
As reported by U.Today, Bitcoin plunged to the $30,000 level earlier today for the first time since July 2021.The massive holdings ofMicroStrategy are now in the red, stoking fear that the market could face a major crisis.Meanwhile, the Nasdaq Composite index has had its worst start in history.