2021-5-24 17:31 |
Bitcoin fell nearly 54% during the latest deep rut, Ether 60.6%, and altcoin as much as more than 90%. Amidst this, Terra (LUNA) lost 81.3% of its value from the all-time high of $22.36 in March.
With this loss, the token has wiped out almost all the parabolic-uptrend it saw in 2021.
As of writing, LUNA is trading at $6.56, with a market cap of $2.58 billion.
This much volatility in the price of LUNA also sent the price of its algorithmic stablecoin UST crashing.
On May 19, TerraUSD saw a big divergence from a dollar peg as it dropped to $0.897 after reclaiming and going to $1.02.
Then on May 23, it yet again started to fall, and UST went out as low as 0.919 but has yet to recover to its full $1 peg. Ever since losing the peg on Sunday, UST struggled to reclaim and continued to trade around $0.974 only to soar to $1.01 just now, as per CoinGecko.
The stablecoin has a market cap of $2 billion.
“The Terra UST stablecoin could collapse in a bank run effect,” commented Ariah Klages-Mundt, who’s building the Gyroscope Protocol, an all-weather stablecoin for the DeFi.
“UST is backed by an endogenous collateral Luna. Current Luna market cap has fallen to arguably < outstanding UST. We are now in a dangerous spiral: as users panic out of UST, this reinforces the Luna crash further.”
The stablecoin’s design is based on endogenous collateral where the value of Luna derives from the anticipated usage of UST.
“While this brought benefits on the upside, it is now materializing in dangerous spirals on the downside.”
While UST didn’t lose half of its value, if a widely adopted stablecoin used by non-crypto people ends up being that way, it could be really bad for the market, is a concern shared by Nevin Freeman of competing Reserve Protocol during the Latin American Bitcoin & Blockchain Conference.
While things will be massively good for the stablecoin, which is marketed very effectively and significantly adopted by non-crypto speculators who want to preserve their savings, it could be terrible for the crypto world if that algorithmic stablecoin that has no backing blows up economically and falls apart and goes down close to zero by ending up getting regulatory backlash, said Freeman.
Amidst all this, Thorchain (RUNE) came in support, tweeting, “Terra is being stress-tested. UST mint/burn creates price-reflexivity on LUNA, and discount is a measure of uncertainty. Do Kwon and his team/backers have their fingers on the pulse and are moving fast. UST to return to parity. Back the builders. Long innovation.”
Luna Coin/USD LUNAUSD 0.0034 $0.00 -28.18% Volume 0 Change $0.00 Open$0.0034 Circulating 1.71 m Market Cap 5.78 K baseUrl = "https://widgets.cryptocompare.com/"; var scripts = document.getElementsByTagName("script"); var embedder = scripts[scripts.length - 1]; var cccTheme = {"Chart": {"fillColor": "rgba(248,155,35,0.2)", "borderColor": "#F89B23"}}; (function () { var appName = encodeURIComponent(window.location.hostname); if (appName == "") { appName = "local"; } var s = document.createElement("script"); s.type = "text/javascript"; s.async = true; var theUrl = baseUrl + 'serve/v1/coin/chart?fsym=LUNA&tsym=USD'; s.src = theUrl + (theUrl.indexOf("?") >= 0 ? "&" : "?") + "app=" + appName; embedder.parentNode.appendChild(s); })(); var single_widget_subscription = single_widget_subscription || []; single_widget_subscription.push("5~CCCAGG~LUNA~USD"); The post LUNA’s Over 81% Price Crash Knocks TerraUSD (UST) Off the Dollar Peg first appeared on BitcoinExchangeGuide.Similar to Notcoin - Blum - Airdrops In 2024
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