Terra LUNA started off the year with a price level of $0.65 and peaked at $21.98 in March amidst the bull run. The market crash had been brutal for the cryptocurrency and it fell to $4.10. The cryptocurrency had been consolidating since the monthly low. However, the market has moved out of corrections and Terra has once again picked up the pace. LUNA coin exploded upwards and has established a new all-time high at $23.32 in the daily timeframe.
Terra has been one of the few cryptocurrencies with a phenomenal performance. The coin surged upwards by 30% in the daily timeframe while the weekly performance has been an increase of 50%. LUNA is the twentieth largest cryptocurrency with a market capitalization of $9.06 billion. What makes the cryptocurrency such an attractive proposition?
What sets Terra apart?
Cryptocurrencies have a notorious reputation of being highly unstable. These are considered primarily as speculative assets with no real holding of their value. Most cryptocurrencies have set a hard cap on the supply which together with the speculative demand contributed to the price volatility. While the price volatility is an attractive opportunity for risk-loving investors to cash in on, it plays as a hinderance in the greater mission of cryptocurrencies which is to become the mode of payment.
The dollar is the reserve currency because of its price stability and the because it has the largest economy of the world behind it. For cryptocurrencies to compete with fiat currencies, they need to have stability as well as a strong underlying technology. Terra has gained popularity because it has managed a way to harness the power of the blockchain while bringing price stability as well. This gives the cryptocurrency better chances at becoming the mode of digital payments.
The ecosystem of Terra is powered by fiat-pegged stablecoins like USDT, Euro EUT, Canadian Dollar CAT and Japanese Yen JPY. To mint a stablecoin on the platform, a percentage of the native token LUNA has to be burned. The increased minting of UST will result in higher burning of LUNA. This mechanism is designed to balance the ecosystem and stabilize the prices. By using the blockchain technology, the platform offers low fees and efficient cross-border transfers.
Price predictions for LUNA
Given the interesting proposition that Terra offers, it is considered to have a good future potential. The cryptocurrency has also established its footing and is one of the top cryptocurrencies in the market. The strong fundamentals support the technical for the cryptocurrency and hence a bullish future outlook.
According to the estimates of Wallet Investor, the future of Terra is bright and the uptrend is expected to continue. Their projections place the cryptocurrency at a price level of $33 in a year’s time while the five-year price is expected to be at $83. Digital Coin Price expects LUNA to end the year with a price level of $32 and reach towards $78 by the end of 2026. Terra may be considered as one of the best bets in the market for a long-term long position.
