Shifts in LUNA have left cryptocurrency investors in shock because the token haemorrhaged value in an unexpected market bust-up. Because it rippled across the market, other currencies were dragged down alongside it. Investors who traded their life savings to “buy the dip” not way back can have been left in financial disaster and questioning what happened.
What happened to Terra Luna?
Terra Luna (UST) ranked amongst the ten most dear cryptocurrencies until this week, with each token price roughly $85 (£69.69) on May 5.
On May 11, it was already in a precarious position, having dropped all the way down to $17.38 (£14.25) within the early hours.
Only a day later, on May 12, the coin forfeited 97.54 percent of its value, dropping all the way down to its current value of $0.02863 (£0.023).
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The sudden and dramatic fall from grace ravaged the coin’s market cap, taking it from greater than $40 billion (£32.7 billion) to simply $500 million (£409 million).
Some investors said they’d lost as much as $450,000 (£368,000), spelling disaster for his or her homes and savings.
UST decoupled from the dollar earlier this week, and the downturn followed not long after.
Do Kwon, the founding father of Terra creators Terraform Labs, addressed the situation via social media today.
He told investors that he was “near announcing a recovery plan” and asked his followers to “hang tight”.
In a following Twitter thread, he praised the Terra ecosystem, and vowed that the currency’s “return to form” could be a “sight to behold”.
The activity in Terra was felt across the market, as other currencies are also trending down at present.
But cryptocurrency experts have said the “extreme volatility” of the last 24 hours was a results of technological nascence.
Analysts from Bitfinex Market Evaluation said the difficulty showed the strength of other, more established coins.
They said: “The capitulation of Terra Luna and the problems that we see with Terra’s dollar-pegged algorithmic stablecoin UST are a part of the growing pains of an area where innovation charts a course at a frenetic pace.
“The actual story of the day is the relatively strong performance of the three leading cryptocurrencies, bitcoin, Ethereum and Tether tokens (USDt).
“The trinity stands strong, demonstrating the strength and resilience of a digital token ecosystem that can define this whole decade.”
Can Terra Luna get better?
LUNA’s stewards on the Luna Foundation Guard are aiming to resurrect UST.
They’ve launched a campaign aiming to lift $1 billion, which they imagine could help accomplish this.
Nevertheless, as with all cryptocurrency, LUNA is very volatile, and even when the coin did get better, the market could easily pull it down again.
The knowledge in this text doesn’t equate to financial advice. Anyone considering investing in cryptocurrency should understand the risks involved.
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