Since its depeg from the US dollar, the Terra USD cryptocurrency has gone through a “makeover”. Now known as Terra Classic USD (USTC) and no longer a stablecoin, the coin is struggling to pick up, fluctuating between the $0.03 and $0.06 levels in July 2022. With its value mostly dependent on the Chinese Yuan, it is unlikely to see any changes shortly. As a result, all those that we’re hoping for a rebound after it gave up its stablecoin status are now disappointed. The developers of USTC claim that it is now more like any other cryptocurrency since it has a fixed value. However, no one seems to have shown interest in it as yet, considering that its daily volume remains under $2 million and most of the trade volume originates from only two exchanges: ZB.COM and OTCBTC. The daily volume of USTC is currently around $1 million and the market capitalization stands at $25 million.
What is Terra USD?
TerraUSD is a cryptocurrency that is backed by three market-making exchanges which buy and sell TerraUSD for the US dollar. These exchanges include OKEx, Huobi Global, and BigONE. It was formerly named Tether (USDT) which was created by Tether Limited, a company based in Hong Kong. The idea behind the stablecoin was to create a coin that will act like the US dollar with its purchasing power being equal to one USD. However, after facing unprecedented pressure from regulators, it gave up on its stablecoin business model and changed its name to Terra Classic USD.
What is the USTC Token?
The USTC token is an ERC20 utility token. It can be used to pay fees that are associated with using Terra’s trading platform which was built by Bitfinex. It also helps users to pay for other services that are offered within the community. The token cannot be mined and the daily volume on exchanges cannot influence its price.
How USTC Token is Different from USDT?
USDT was never meant to be used as a payment mechanism, unlike USTC. On the other hand, a fixed number of tokens have been issued for use by users worldwide to keep a balance of $1 worth of value. Another difference with the Tether cryptocurrency is that there was no ICO for the USTC token and it does not have any swap functionality.
Which factors influence the price of USTC?
The price of USTC is determined by its trading volumes on exchanges. If the exchange listing the token has a large daily volume, it will get listed on other exchanges as well. At times, some exchanges add tokens to their platform without doing any prior research about them. In some cases, these tokens are proved to be useless for trading and eventually get delisted because of poor performance. This can hurt their prices in the future.
Market Analysis
TerraClassicUSD (USTC) has been in the limelight from the time it launched as a stablecoin. This is because of its similarity with Tether (USDT). It was launched as a hybrid of USDT and Tether which allowed users to get USD for their money at any given time. However, stablecoin tried to diversify its business by launching a trading platform in April 2018. This pushed it further away from being tied to one Bitcoin and instead necessary to finance itself through marketing activities such as advertisements on social media platforms. The price of USTC reached its highest point at $0.0725 in June 2018 before falling below $0.
How much did it cost initially?
Originally, 1 Tether (USDT) was worth USD 1. After its split from Tether Limited, the founders of USTC formed a new company called Treasury NEO Holdings Limited which will govern the development of this cryptocurrency and even manage its reserve.
