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LUNA Meltdown: Theories And "Told-You-So" From Crypto Community
The Terra cryptocurrency project came crashing down as the core value of its stablecoin fell nearly 97% from highs, while the coin itself plunged over 71%.
Crox Road
October 30, 2022
Table Of Content
Content
Introduction
Conclusion
FAQ
You May Also Like
External Links
Introduction
The value of Terra's currencies plummeted as Kwon's creation, LUNA, sank more than 97% from its highs and as the stablecoin TerraUSD (UST) fell 75% lower than its planned dollar parity. There was a time when the price of LUNA was lower than that of UST.
The failure of the coins has actual repercussions for everyone involved. A number of suicide prevention hotlines have been posted to the r/Terraluna subreddit. As the LUNA issue continues to develop, the subreddit makes for a very unsettling read.
So, how did it come about? How did a system that was run by a cocky person manage to go through one of the biggest crashes in the crypto industry?
What was at first understood to be an assault on Luna based on FUD (fear, uncertainty, and doubt), has developed into something far more conspiratorial and devious. The "attack" on the Terra Nova environment, which allegedly was instigated by George Soros and resulted in the buyer pocketing more than $800 million, is one of the ideas that has gained the greatest traction.
Ransu Salovaara, the Chief Executive Officer of Likvidi, echoed this hypothesis when he explained to Cointelegraph that "certain parties selected UST's algorithm peg as a market manipulation target and borrowed masses of Bitcoin to perform this assault on UST in what some term a "Soros style.""
The so-called assault attracted the attention of the mainstream media, and on Tuesday, United States Treasury Secretary Janet Yellen brought up algorithmic stablecoins at a hearing of the Senate Banking Committee in order to emphasize the "risk" that these stablecoins provide. Frances Coppola, who is an economist, agreed with the conclusion that what happened at UST was an attack.
When Ran NeuNer, presenter of CNBC's Crypto Trader and a "close buddy" of Kwon's, suggested that the American market maker Citadel may be the one responsible for the "attack," the rumor mill went into overdrive. Kwon denied the allegations. The Chief Executive Officer of IOHK, Charles Hoskinson, has also said that the "word on the street" is that it may be Citadel.
Despite the fact that billionaire Ken Griffin, founder of Citadel Securities, has made his distaste for the cryptocurrency business known by comparing the trillion-dollar market to abstract painting, it is still just conjecture whether or not Citadel would launch an assault on UST. People in the cryptocurrency community couldn't help but accuse Neuner on Twitter of hiding his large amount of LUNA to keep their value up.
In the meantime, a crypto researcher by the name of Larry Cermack hypothesized that more than one billion dollars is on the way to bolster the Luna Foundation Guard and battle the wildfire. Cermack stated that Celsius, Jump, and Alameda, among other entities, would contribute to the venture capital fund.
Putting theories aside, many crypto watchers, researchers, and believers think that the UST vehicle accident was a) one of the most important deaths in the history of the crypto industry and b) something that could have been predicted.
LUNA's implosion is "by far" the worst Ponzi death spiral collapse in the history of Crypto, by a factor of 16, according to Tree of Alpha, a white-hat hacker who identified a crisis-level bug in the Coinbase API. A similar prediction was made by Nic Carter of Castle Ventures, who referred to it as "the most dramatic collapse in the history of the crypto sector."
Tree of Alpha linked LUNA to the Ponzi scheme that turned out to be Bitconnect. Bitconnect was a $2.4 billion scam run by Carlos Matos, who was heavily memed, and is now known as one of the worst cases in the history of cryptocurrency.
Lyn Alden, who is now ranked No. 100 on the list of the Top 100 cryptocurrency influencers by Cointelegraph, has also previously warned about UST's potential problems. In a letter to investors that he sent out, Alden detailed the accompanying "selling pressure" that would flood the market with tens of thousands of coins if the UST peg were to fail. She was correct; all of the occurrences that she described had taken place during the previous two days.
Perhaps the most conclusive "I did warn you!" came from John Carvalho, the Chief Executive Officer of Synonym, when he said that UST seemed to be "a gigantic trap." In March of 2022, he cautioned his followers to avoid UST:
Conclusion
It is going to take Terra a significant amount of time to win back the confidence of investors. As of this moment, there does not seem to be anything in place that can prevent anything similar to what occurred with Terra LUNA and TerraUSD from taking place again. And people need to be concerned about it.
In addition, a coordinated selloff like this one might take place in the market for other cryptocurrencies as well... Especially in light of the fact that people are now aware of how fruitful and profitable it can be. Because of this, what happened with Terra is an even greater source of concern. On top of that, it was a disaster for a lot of people who had invested in Terra LUNA.
FAQ
Is it smart to purchase Luna now?
If I Wait Until 2022, Will It Be Too Late to Buy Luna? After hitting a low of 0.12 USD on March 18, 2020, LUNA has been one of the cryptocurrencies with the highest performance over the last two years, with an increase of over 76,130 percent from that low point. In addition, LUNA held the seventh place as the most valuable cryptocurrency asset based on market capitalization in the month of March 2022.
Is Luna a good investment for 2022?
There is a possibility that the price of LUNA will attempt to get beyond the mark of $120.25 somewhere around the middle of 2022, as shown by the projection made by the crypto-analytical source at Government Capital. It is possible that the rate of exchange for Terra (LUNA) will be set at $123.47 by the end of July.
What is the market value of Luna Terra?
At the moment, the price of one LUNA is $0.00023. Terra is now trading at a price that is 100.00% lower than its all-time high of $119.184624. The total amount of LUNA that is now in circulation is 6,589,070,100,699.171.
That's all for today, see ya tomorrow! If you want more, be sure to follow our Twitter (@croxroadnews)
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
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