TerraUSD (UST) resumed its downward spiral Tuesday afternoon New York time, sinking below $0.80 as it breached a relatively quiet 12-hour period when its price remained stable around 10% off its dollar peg.
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Terra’s shaky stablecoin has struggled to maintain its $1 target since this weekend’s dips began; it reached as low as $0.68 Monday in a swan dive that prompted billion-dollar rescue efforts from reserve overseer, the Luna Foundation Guard.
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Crypto market participants, regulators and critics are keenly watching UST’s flailing to measure up the concept of algorithmic stablecoins, which rely on programs (over full collateral) to stay at $1 a coin.
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“I think that simply illustrates that this is a rapidly growing product, and that there are risks to financial stability, and we need a framework that’s appropriate,” Treasury Secretary Janet Yellen said of UST at a Senate hearing Tuesday.
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Sinking to $0.78 and lower late Tuesday, UST ruptured the day’s staid trading session amid reports by The Block that LFG was searching for a $1 billion bailout. Firms reportedly involved in the talks did not immediately respond to CoinDesk.
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Luna, the token meant to act as a backstop to UST’s price, lost 63% of its value over the past 24 hours, plunging from $44.18 to less than $16 at press time. The token traded hands above $86 less than a week ago..
UPDATE (May 10, 2022, 22:28 UTC): Adds context on Luna’s price.
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BTC$31,404.35
ETH$2,372.82
XRP$0.518462
SOL$67.82
CRO$0.233948
View All Prices
