Unlike “traditional” stablecoins backed by fiat money, terraUSD (UST) uses an algorithm to maintain a consistent value. These algorithms typically link two coins and adjust the prices depending on the supply and demand of investors.
It has been a challenging year for cryptocurrencies. The meteoric collapse of several industry heavyweights and their collateral damages have caused investors and regulators to put their guards up as significant cryptocurrencies continue to trade on multiple-year lows.
Coming off a blockbuster year and achieving an all-time high of over US$69,000 ($93,559) apiece on Nov 10, 2021, Bitcoin traded from around US$30,000 to US$40,000 apiece early this year. After reaching a peak of over US$47,000 apiece on March 30, the token’s value dropped by 18% over the next three months, exacerbated by the Terra Luna collapse.
