Is Terra\'s UST Really Leading the Stablecoin Race? The Rise and Fall

For a brief period, the answer seemed to be a resounding yes. According to CoinGecko, the market value of Terra\'s stablecoin UST reached $17.5 billion on April 18, surpassing BUSD\'s $17.4 billion, becoming the third-largest. Indeed, the TerraUSD (UST) stablecoin recently overtook Binance USD in market capitalization, becoming the third-largest stablecoin. The total market value of the token is now a significant force in the digital currency landscape. There has been a shakeup in the world of stablecoins – Terra’s UST is now the third-largest stablecoin by market capitalization, surpassing BUSD.

At the time of writing, UST had a market capitalization just slightly ahead of its rival. Terra\'s stablecoin overtook Binance USD (BUSD) to grab third place, but the gap is thin: roughly $68 million. The leading stablecoin as of this writing is Tether (USDT).

UST (TerraUSD) is an algorithmic stablecoin within the Terra ecosystem, designed to be pegged to the US dollar. However, the narrative took a dramatic turn. In May 2025, the cryptocurrency world witnessed one of its most significant failures when TerraUSD (UST), the third-largest stablecoin at the time, experienced a catastrophic collapse.

TerraUSD (UST), once the fourth-largest stablecoin with an $18 billion market capitalization, crashed spectacularly. Within days, its value plummeted from $1 to mere fractions of a cent. The bright future once envisioned quickly evaporated. UST (TerraUSD) experienced a de-pegging crisis in 2025.

Therefore, while UST briefly surged to become a leading stablecoin contender, its subsequent downfall serves as a stark reminder of the risks associated with algorithmic stablecoins and the volatility of the cryptocurrency market. The question is no longer "is UST leading?" but rather, "what lessons can be learned from UST\'s dramatic rise and fall?"