Terra’s stablecoin USTC and its native coin LUNA (currently known as LUNC) were at the heart of the summer 2022 crash. USTC lost its peg to the dollar, and a new LUNC was created to counter to same. Firms with significant exposure to LUNC and USTC were gravely affected. Many filed for bankruptcy, while others were part of acquisition deals. Nonetheless, the Terra collapse was as historic, as it was downright disastrous.
However, as the broader crypto market enters another volatile phase, Terra’s USTC seems to be the highest gainer among the top 100 crypto projects. At press time, USTC is up by 49.5% in the last 24 hours, and by 58.6% in the last 7-days. Moreover, the token is up by 49.7% in the last 14-days. This is especially surprising as most major projects are currently decreasing in value. The fall in the markets is most likely in anticipation of the CPI numbers which are due on the 13th. As per analysts, the Fed will most likely increase interest rates by another 75 basis points in November.
Moving on, let’s address the elephant in the room…
Why is Terra’s USTC pumping?
USTC’s pump follows the announcement of a re-peg proposal. The proposal was made by Tobias Andersen, who is one of the developers on the network. Andersen has also published a blog, outlining the steps and initiatives that could push USTC to the dollar mark.
Andersen states in his blog,
“To accomplish this feat, we will need to implement a host of new features that can enable us to establish additional “capital controls” which will allow entrepreneurs to create new features on one of the few truly “community-driven” networks in the crypto space, without assuming any risk to their investors capital. All whilst granting them interoperability with existing network assets such as wallets, end-users, smart contracts, etc.”
The announcement did get a lot of people excited. A USTC re-peg to the dollar would be as historic, as was its fall. Nonetheless, the Terra USTC rally does seem a little random, given that the rest of the market just took another hit this morning. The global crypto market cap dropped by 2.7%, sitting at $956 million. While USTC did rally by almost 50% in 24 hours, the price has only increased by 2 cents or so.
At press time, USTC was trading at $0.050130.