I've said it for along time now. I do not believe for a second that one cryptocurrency will dominate all and we are seeing Bitcoins market cap along with it's 24 hour volume/velocity has come under heavy pressure from other cryptocurrenies.
In fact even Ethereum itself almost out beats bitcoin in 24 hour transaction volume even though it's market cap is just under half of that of Bitcoin. At the moment of writing this Bitcoins dominance holds at 40% which is down to levels it hasn't seen since the last rally of 2017.
Still a far cry away LUNA holds about 28 billion in funds and Matic just 10 billion in comparison to Ethereum at 316 billion. This should show you clearly how far many of these tokens are from in becoming a leader in the crypto space and now much effort, development and so forth they still need to do.
Terra (LUNA)
A large portion of why this token has rallied in the last few days was the announcement that the release of a new stablecoin of Terra called TerraUSD will be backed by 1 billion in bitcoin reserve.
*Personally I don't see how you can back a stablecoin with a non stablecoin that falls and grows in value at much as 10% in a weeks time but maybe that's beyond my paygrade so if anyone can shine light on that I encourage you to drop it in the comments please.
This 1 billion in new asset should in theory pump the market cap of LUNA by about 5% but of course we all know people for whatever reason buy into the news while the smart ones sell the news. It still floors me to this day how many people are clueless on that lol
What will be an interesting play to watch is how LUNA and TERRAUSD will work together. It's said that when the price of it's UST stable coin is lower than $1 per token the UST can be swapped for LUNA that gets minted and sold for $1 thus creating arbitrage gains for it's investors. If the other scenario plays out where the demand for UST then LUNA is burned reducing the supply of luna and increasing the price.
I have to say this kind of sounds like what Hive and HBD has been trying to do for the last year and with limited success. HBD still flies between $0.87 to $1.20 at times which is far to unstable its a 10% downswing and a possible 20% upswing that still happens on a stablecoin. 1% or less is tolerable if quickly corrected as we still with main stablecoins.
Is the buy in of $1 billion enough to offset those risks for LUNA and it's stable coin? It seems like investors are betting on it.
Polygon (Matic)
Polygon has pretty much held its ground as of late or moved with the overall markets. At the time of writing this down nearly 7% as the markets do get hit. Polygon however has for sure carved out it's place in the markets and also by being the only other "alt" token to be accepted on OpenSea. There's a lot going for Polygon but as we all know development takes time many times 1-3 years for applications to really start to kick online. Polygon has only seen the spotlight for almost a year now which means this summer and towards the end of the year we should start to see some of these projects get released thus pushing up the value of Polygon again.
I feel right now Polygon is in that bounce pattern where it doesn't rally over overall instead it just bounces between two price points as no real news and developments have come out.
What do you think of this? Could Hives ecosystem learn a lot from watching what is happening with these other chains?