Why has Luna crashed so much? Best News given by USA 14-05-2022
Why has Luna crashed so much?, Luna crashed due to its link to terraUSD (UST), a stablecoin which was pegged to the US dollar. Stablecoins are cryptocurrencies linked to traditional ones. UST decoupled from the dollar earlier this week, which sent its price tumbling through the floor.
Luna’s market cap has fallen from $40bn (£32.9bn) to little over $200m (£164m).Leading crypto exchange Binance temporarily suspended withdrawals on Luna on Wednesday.
The coin’s collapse comes amid a general downturn for cryptocurrency, with many coins losing a quarter of their value in the past 24 hours. Investors appear to be moving away from cryptocurrency and towards less risky investments in the face of global inflation. :”Why has Luna crashed so much?”
Shares in Coinbase, the largest crypto exchange in the US, dropped 15.6 per cent overnight on Tuesday after it posted net losses of $430m (£348m), far worse than analysts were expecting.
Coinbase cited a “trend of both lower crypto asset prices and volatility that began in late 2021”, but was quick to point out that it does not expect these conditions to be “permanent”.
The news has raised questions about whether the market has reached an expected cooling-off period – previously dubbed a “crypto winter” – or a more permanent chill, perhaps a “crypto ice age”. “Why has Luna crashed so much?”
“The market is caught in the wider adversity of investment markets that are battling to decide where confortable levels are in the wake of interest rate hikes designed to quell soaring inflation around the Western world.”
Evil genius’ may have caused Terra and Luna cryptocurrencies to crash in a “death spiral”
It’s been a stressful week for those who own bitcoin and other cryptocurrencies, as they watched billions of dollars get wiped off the value of their assets.
Bitcoin (which has often been touted as “digital gold” or a “hedge against inflation”) plunged below $US25,500 this week — a far cry from the record high $US69,000 price tag it commanded back in November. “Why has Luna crashed so much?”
The wider crypto market (which includes thousands of digital currencies and tokens) has seen its value plunge by more than 50 per cent since then.
Terra (UST) is a stablecoin, which is meant to be worth $US1
Its value is backed by a “sister” token called Luna
Luna’s value plunged 99pc, causing some investors to lose their life savings “Why has Luna crashed so much?”
Terra Luna crash – Can Luna recover?
The cryptocurrency Terra, or as it’s otherwise known, Luna, has faced a major collapse this week, with the value to the digital currency dropping my more than 99 per cent. “Why has Luna crashed so much?”
The value of Luna fell dramatically on Wednesday falling from $6.75 to just over $1 and as of Thursday afternoon it fell even further with the currency valued at just $0.02.
Investors who have accumulated Luna are asking whether the currency will ever recover after YouTube and music star KSI revealed he had lost millions due to its collapse.
Speaking to his 7.5 million followers, he tweeted: “What a week. I went to my hamsters funeral, performed in front of thousands of people at Wembley Arena with Anne Marie, my 3 million dollars worth of Luna is now worth a few $100. And it’s only Thursday.” “Why has Luna crashed so much?”
Will Luna recover?
Of course the coin has potential to recover but it comes at a time of uncertainty in the market.
There is currently a general downturn for cryptocurrency with many coins losing a quarter of their value as investors appear to be moving towards safer investments amid the current financial market.
The founder of Terraform Labs, Do Kwon tweeted this week: “Close to announcing a recovery plan for $UST. Hang tight.”
He later added: “I understand the last 72 hours have been extremely tough on all of you – know that I am resolved to work with every one of you to weather this crisis, and we will build our way out of this.
“The Terra ecosystem is one of the most vibrant in the crypto industry, with hundreds of passionate teams building category defining applications within… Terra’s return to form will be a sight to behold.” “Why has Luna crashed so much?”
Terra Blockchain Resumes Following 9-Hour Halt
The blockchain was halted at block 7607789 slightly after 3:00 UTC Friday. Blocks 7607790 and 7607791 then came through at around 11:27 UTC.
Following the resumption of the blockchain, Terraform Labs, the company behind the Terra ecosystem, tweeted that network validators have disabled on-chain swaps and Inter-Blockchain Communication (IBC) protocols have been closed. It encouraged users to “bridge off-chain assets, such as bETH, to their native chains.”
‘Stable in Name Only’: Stablecoin Issuers Speak Out as UST Craters
As the cryptocurrency industry takes stock of the dramatic unraveling of the UST project, those that build and maintain stablecoins are at pains to point out that these instruments aren’t created equal. “Why has Luna crashed so much?”
That message needs repeating, says Dante Disparte, chief strategy officer and head of global policy at Circle, creator of the USDC stablecoin, because it’s not obvious to people outside of crypto and that may include regulators and politicians whose attention will now be focused on the industry. “Why has Luna crashed so much?”
“I do think there’s a conversation around disassociation; that the term of art ‘stablecoin’ has probably run its course,” Disparte said in an interview.
“It does warrant a discussion around, do algorithmic stablecoins even belong in the class of instruments that are subject to existing regulations? Do they belong inside the perimeter that touches real consumers and real payments?” he added. “Why has Luna crashed so much?”