Terra LUNA: The 2022 CRASH
From Hero to Zero, UST and LUNA remains the talk of the town. Here are all the circumstances that has led to the complete LUNA crash:
Terra is a blockchain ecosystem that attracted investors to its platform Anchor, promising a high yield returns of 20% annually on their dollar-peg. It is represented by two tokens: The bitcoin-backed LUNA , and UST that prints LUNA and sells it to keep its peg at 1$. By backing itself through BTC, LUNA promised to maintain its high prices. Such a strategy was successful for some time as LUNA eventually became one of the top 10 biggest cryptocurrencies before its crash.
On Saturday, signs of trouble started to show when one big investor withdrew his deposits. As a result, UST broke its peg (currently trading at 0,47$). UST prints large amounts of LUNA and sells them in hopes of bringing back the UST peg to 1$. Consequently, the LUNA token crashed by 95% of its value. Currently, it's worth 0.09 $ compared to 70$ only five days ago. Terra’s desperate attempt at rescuing its tokens will not leave the wider market indifferent. As Terra sells large amount of BTC, panic is taking ahold of investors who are following its lead.
In our opinion, this crash does not mean the end of Bitcoin, but rather an opportunity to buy it for cheaper. Do not take it as a financial advice.
You can see the history of Luna's crash directly on the price chart. Feel free to check it out here. If you liked what you have read, check out our socials for more content.
Do your own research (DYOR) and Resh out!
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