TerraUSD (UST) continued its downward spiral Tuesday afternoon New York time, dipping below $0.80 as it broke a relatively quiet 12-hour period in which its price remained stable around 10% away from its dollar peg.
- Terra's shaky stablecoin has been struggling to hold its $1 target since the price dips began over the weekend. On Monday, it reached just $0.68 in a nosedive that prompted multibillion-dollar rescue efforts by the reserves' overseer, the Luna Foundation Guard.
- Crypto market participants, regulators and critics are eagerly watching how UST does to measure the concept of algorithmic stablecoins that rely on programs (via full collateral) to stay at $1 per coin.
- "I think it just goes to show that this is a fast-growing product that poses risks to financial stability, and we need an appropriate framework," Treasury Secretary Janet Yellen said Tuesday at a Senate hearing on UST.
- UST sank to $0.78 and below late Tuesday, breaking the day's quiet trading, after The Block reported that LFG is seeking a $1 billion bailout. Companies reportedly involved in the talks did not immediately respond to CoinDesk.