Will The Terra (LUNA) Coin Reach $500?

Terra (LUNA) has what it takes to hit $500 or more.

Last Updated February 14th 2022

5 Min Read

Terra has a tremendous potential to reach new ATH’s as per the fundamental analysis. According to LUNA price predictions Terra can hit the $500 mark by the very end of 2025. influencers and experts,

Cryptocurrencies are highly volatile assets that can be hard to predict where they go next. However, based on adoption and the market scope that a cryptocurrency targets, it is possible to predict a cryptocurrency's direction. For instance, Terra has a fast-growing DeFi ecosystem, a factor that saw it become one of the best performing cryptocurrencies in the 2021 bull rally.

LUNA is likely to keep performing better than most cryptocurrencies in the future. While there are no absolutes in crypto, below are some reasons we believe Terra (LUNA) could reach $500.

Terra Has A Growing Ecosystem Of Cryptocurrencies Building On It

Terra looks very close to where Ethereum was before the 2017 ICO bubble. The community is growing, and the number of DeFi cryptocurrencies building on top of Terra is rising. As of December 2021, Terra had become the 2nd largest DeFi chain in the market.

One of the areas to DeFi that Terra has recorded exponential growth is the launch of algorithmic stable coins. These stable coins are anchored on LUNA tokens, which means the more they grow, so does the value of LUNA. This correlation is evident in the more than 45,000% rally in the price of LUNA following the increased popularity of UST in 2021.

Besides stable coins, Terra-based DeFi cryptocurrencies are on the rise. Some of the more notable ones are Anchor Protocol, which allows investors to earn a passive income off crypto, Mirror Protocol, Pylon, among others. All these are still in their early days, and in a few years, could be multiple times bigger than they are today.

Of all the projects that are building on Terra, it is stable coins that could trigger a major explosion in the value of LUNA. For context on how big of a deal this is, consider that countries are also moving into digital fiat. Companies, too, are embracing stable coins for their ease of use in everyday transactions. It is not a fluke that Tether (USDT) is one of the largest cryptocurrencies by market cap.

Lately, algorithmic stable coins such as those issued on Terra have grown in popularity too, and in a few years, could come to dominate the stable coins' market. That's because they are more efficient and have a lower risk of running in trouble with the law. Unlike traditional stable coins like Tether, there are no concerns of whether algorithmic stable coins are backed 1:1 by actual fiat. An algorithm maintains stability.

With the growth in stable coins, and the other DeFi protocols all reliant on LUNA, it is not unforeseeable for Terra LUNA to hit $500 or even $1,000 per token.

In just one year, Terra went from under $1 to $100, and it was a relatively unknown cryptocurrency. Now that it is well-known, there is every reason to believe that LUNA could do $500 or more in the coming years.

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Terra Follows Broader Market Momentum

Terra (LUNA) has proven to be quite responsive to momentum in the broader market. This is evident in its 2021 price action, where it became one of the best performing cryptocurrencies. It rose from obscurity to one of the top 15 largest cryptocurrencies by market cap.

Terra's responsiveness to the broader market is a plus for its long-term growth. That's because the odds favour the cryptocurrency market growing by many multiples from its current price.

For context, there are many projections that Bitcoin could trade at over $200k by 2025. Some predictions even give it a potential of $500k or more per coin by 2025. For instance, Cathie Woods of Ark Invest believes that if S&P 500 companies invested 5% of their cash reserves, Bitcoin at $500k by 2025 would be attainable. There is also the Bitcoin halving that is coming up in 2024, and if past Bitcoin halving's are anything to go by, prices above $200k could be attainable by 2025.

This also presents good news for LUNA. Besides its fast-growing ecosystem that has pushed up the price of LUNA over the past year, a massive increase in the price of BTC could uplift it, too. Of all the factors that could boost LUNA, a broader market increase is one of those that could easily see LUNA reach $500 or more in the next few years.

Terra Has A Vibrant Community

The community that a cryptocurrency has influences its success in a big way. To understand the importance of a community, one needs to look at meme coins like Shiba Inu and Dogecoin.

Dogecoin was formed was as a joke coin but quickly developed a large community around it. This vibrant community saw Dogecoin maintain its position, as one of the top cryptocurrencies by market cap, to the point that Elon Musk took note of it and sent it to greater heights.

Terra has an equally strong and growing community, but unlike DOGE, is one of the most fundamentally strong cryptocurrencies in the market. As the community hypes up Terra, coupled with its growing use cases, the number of investors that use it is likely to grow as excitement in the crypto market grows. This is a factor that could see Terra (LUNA) test $500 or more, especially once bulls return to the market.

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Terra Is A Deflationary Cryptocurrency

LUNA is the cryptocurrency that stabilizes the stable coins that launch on the TERRA ecosystem. Essentially this means that LUNA is a deflationary cryptocurrency. That's because the more the demand for stable coins, the circulating supply of Terra will also drop since LUNA is burned in the process.

Not only does this make LUNA a cryptocurrency worth holding long-term, but it also means that Terra has the potential to gain by many multiples from its current price. $500 or even $1000 per LUNA token is attainable.

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