Stablecoins have become a major part of the blockchain industry. On Thursday, the Tron price went parabolic after Justin Sun revealed plans for a new stablecoin. TRX jumped to a high of $0.07478, the highest point since April 4th. This price was 28% above its lowest point this month. It then retreated slightly as the momentum waned and traded at $0.0672.
Tron is the latest blockchain project to announce plans for a new stablecoin. In addition, NEAR Protocol is expected to launch its USN stablecoin this month. In most cases, these platforms have been inspired by Terra’s success in the past few months. This week, Terra’s UST stablecoin managed to pass Binance USD in terms of market value. It is now valued at $17.96 billion, making it the third biggest after Tether and USD Coin.
Another big stablecoin-related event that happened this month was that Blackrock and Fidelity invested $400 million in Circle, the parent of USD Coin. This was a notable investment because Blackrock is the biggest asset manager globally, with over $10 trillion in assets. It is also exploring how to use stablecoins in its business.
Tron’s stablecoin is significantly similar to Terra’s UST. However, it will not be backed by fiat currencies like the US dollar. Instead, it will algorithmically be backed by TRX, and all its assets will be decentralised.
To a large extent, the launch of Tron’s stablecoin was straightforward. For one, the platform processes billions of stablecoins every day. The transfer volume of Tether has been worth over $8 billion in the past 24 hours. At times, this amount is usually bigger than that in Ethereum’s blockchain. However, with the number of stablecoins rising, it is unclear whether USDD will be successful.
The TRX price went parabolic on Thursday after the new stablecoin plans. However, these gains were short-lived after the hawkish statement by Jerome Powell. On the daily chart, it is at the center of the ascending channel, shown in green. It has also moved slightly above the 25-day and 50-day moving averages, while the Relative Strength Index is slightly above 50.
Therefore, there is a likelihood that the Tron price will continue retreating on Friday as bears eye the support at $0.06, which is an important support.
This post was last modified on %s = human-readable time difference 08:26