Luna cryptocurrency loses $45 Billion all of its Market Value

The digital currency market fell from its $3 Trillion market value to $1.3 Trillion which is more than 50%. Affected by the FED decision on the highest interest rate rise since 2000 and the plunge of global indices and inflation. The biggest drop among the cryptocurrencies was a crash of the LUNA cryptocurrency, including its stablecoin UST which fell 92% to a value of $0.08, well below $1 its peg value. The sharp decline in the “stablecoin” and the fear that the system is collapsing pushed the LUNA community to start with mass-selling which led the coin to fall from its highest record of $110 in April to $0.0001 in early May. Later on, Terra Labs announced its halt to its blockchain technology until a way out from this is found.
Stablecoins market value is estimated at 15% of the cryptocurrency market. Stablecoins are known for their safe investment by backing the digital stable currency to a specific commodity such as gold or the dollar. UST, one of the most famous stablecoins, says that its currency is pegged to the dollar and that 1 UST is equal to 1 dollar. However, this didn’t turn out to be true and the blame was on the South Korean-based Terra company led by Do Kown. The $45 Billion loss caused big disappointment and losses for UST users, especially since they consider investing in the digital stablecoin as a safe investment for their savings.
The difference between UST and other stablecoins is that UST’s “stability” is dependent on its complex algorithms linked to its digital currency “Luna” which is supposed to prevent the currency’s price from falling below one dollar. It is clear now that crypto stablecoins can’t be really trusted without real assets backing them. Other stablecoins like “Tether” is backed by dollar cash reserves.
Despite all that, cryptocurrency experts believe that the restructuring of Tera and its re-governance after the launch of Tera 2.0 which will use a different technology will revive the coin, especially the community surrounding Luna have full confidence, or at least some hope, that the currency will correct its value and their loss will be compensated.
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#luna_Crash
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#stablecoins_crash
19/05/2022
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