Investors in cryptocurrencies never expected to have to decide whether TerraUSD (UST) or LUNA would hit $1 first. As the Terra ecosystem disintegrated on Wednesday, that topic became the talk of the crypto sphere.
As Bitcoin started feeling the heat of changes in the economy, many prominent coins crashed. A major crash was observed for LUNA holders among others and their trading price dropped almost 99% overnight – it’s a bad time to be selling!
About
Luna’s price dropped from $54.36 early Monday to $3.71 at the time of writing. Needless to say, a lot of money has been lost in a short amount of time. Luna is currently worth $7.34 if you purchased it six months ago for $100. That’s right if you bought $100 of Luna just 24 hours ago, it’s currently only worth $12.67.
Terraform Labs co-founder Do Kwon took to Twitter to outline his rescue plan as the algorithmic stable coin UST lost its dollar peg, plunging to a low of roughly $0.30. According to CoinMarketCap, the value of sibling cryptocurrency LUNA, which was previously a top-10 crypto project by market capitalization, plummeted almost 98 percent to $0.84. In early April, LUNA was trading for more than $120.
Apparently there has been 8 confirmed suicide due to the $Luna crash.
Stay strong and reach out to those struggling right now
— Crypto in Vietnam #BabyDoge 🚀 (@Cryptocraziac) May 11, 2022
But Luna isn’t the only one who has had a hard time this week. Bitcoin has dropped 5% in the last 24 hours, Ethereum has dropped 4.3 percent, and BNB has dropped 7.7%. Things become worse as you move down the list of prominent coins, with XRP (Ripple) down 5.8%, Solana down 12%, and Cardano down 11.6 percent. All of this happened in a single day.
In the midst of the commotion, Cointelegraph experts Sam Bourgi, Jordan Finneseth, Marcel Pechman, and Benton Yuan hosted an emergency edition of “The Market Report,” which usually airs on Tuesdays, to talk about what happened.
Recent History
Before discussing how UST lost its peg, Bourgi outlined the theoretical basis of algorithmic stable coins and why they’re intrinsically hazardous. Remember how excited everyone was when Luna Foundation Guard bought Bitcoin (BTC)? According to Bourgi, this was one of the biggest red flags.
What’s the matter? Stablecoins, for example, appears to be crumbling. TerraUSD, Terra’s stable coin, fell to $0.69 late Tuesday before recovering marginally when the Terra Foundation sold a large amount of bitcoin. Then it plummeted to a low of $0.31 early this morning, before rebounding to $0.44. Stablecoins are designed to maintain a peg to a certain currency, most typically the US dollar, but the stability is fiction because the “reserves” for these stablecoins are nearly invariably non-US currencies.
To those wanting a source regarding my tweet. I saw the post on the Reddit Luna megathread. It isnt much to go off and doesnt have much substance but I am sorry for tweeting without attaching the source https://t.co/HIp8e2JRuh pic.twitter.com/y0IbW72ykd
— Crypto in Vietnam #BabyDoge 🚀 (@Cryptocraziac) May 12, 2022
During her appearance before the Senate Banking Committee on Tuesday, Treasury Secretary Janet Yellen also mentioned TerraUSD, a stablecoin produced in South Korea, as well as the volatility of stablecoins.
The Real Truth
An investigation by an independent media outlet has determined that the viral claim of “8 Confirmed Suicides due to Luna Coin Crash” is false. None of thesesuicides were associated with luna coin and there isn’t any statistical data proving its link either, making this story rooted in rumors rather than truth.
Real or Fake?
The fake news story about Luna Coin crashing and causing suicides is completely unrealistic. There are no statistical data to back up this claim, which means it can’t be true – even though some people believe otherwise!
The news of “8 Confirmed Suicides due to Luna Coin Crash” went viral on Social Media. The story initially started popping up in Pakistani-based media outlets and then made its way onto major Crypto-related Twitter handles – though many have called out these accounts for reporting fake information as they were never able to confirm any such thing happening at all!
Media outlets all over the world were alerted to this controversial story when a Twitter handle claiming ownership of Luna Coin released a statement on their website that eight people had killed themselves due to its recent plunge in value. The first source for viral claims found among those who believed it was legitimate? A Pakistani user @republicdotpk with more than 10 thousand followers!
Finneseth explained how market crashes affect market psychology and why investors should expect more suffering in the months ahead. Meanwhile, Yuan highlighted some possible speculations as to who might have orchestrated the BTC dump that sparked fear throughout Terra’s ecosystem.
In the midst of market turmoil, Celsius Network executives dismiss rumors of large losses.
Pechman, true to form, placed the LUNA fall in the context of the global financial system, concluding that crypto and Bitcoin remain the greatest investments.
Under no circumstances do you “must hand it to Luna.” In fact, if you want to make it out of 2022 with some money in your pocket, you shouldn’t give it to bitcoin. According to Yahoo Finance, at least 40% of bitcoin investors are currently in the red. And it doesn’t appear to be getting any better anytime soon.
Bitcoin proponents began 2022 by touting the cryptocurrency as an inflation hedge. If you’ve been holding US dollars for the past six months, your money has lost around 7% of its value due to inflation. However, if you owned bitcoin, your “currency” has dropped by 52% and counting. At the very least, you can exchange your US dollars for necessities such as food and medicine.
Sam Bankman-Fried is delving into the Terra-LUNA debacle
The New York Times reported that the United States Department of Justice is now investigating Sam Bankman-Fried, founder of the defunct FTX.com cryptocurrency trading platform, for alleged market manipulation concerning Terra-LUNA’s crash in May.
Thank for this information, but the truth behind this luna, it follows the Bitcoin algorithm. So anything happens or any little drop from Bitcoin the rest will follow.😆