The crypto market looks very brutal now. Red charts are in all directions. Bitcoin ended up in this red for 8 weeks continuously. It is a record for this crypto website. Ether is at its lowest point from 2020. It is very painful for all crypto investors. But this dive was not fully unexpected. Crypto is not that very famous due to its volatility. Their turbulent economic conditions brought down not only crypto but also the stock market. However, the collapse of LUNA and its stable coin UST has been unprecedented. A huge amount in crypto wealth got vaporized and sent shockwaves all over the entire market.
The new cycle of crypto in the last few weeks is hugely dominated by LUNA. The digital coin was among the top 10 most valuable crypto. Now it is ranking beyond 200. Everything happened within a few days. So the main concern is if this stablecoin platform will be returning to its good days ever again. Terra went bust over the past week. It has hit all-time lows with little recovery. Currently, LUNA is seen to face huge volatility with swings of 50 % each day.
What will happen to Terra, LUNA, and UST?
It's been an unpleasant week for developers of Terra since UST got de-pegged.
CEO of Binance, Changpeng Zhao, addressed how the Bitcoin reserves of the project were utilized.
The Luna Foundation Guard, for safeguarding the peg of UST, shared a tweet that its Bitcoin reserves tumbled to only 313 which is $9.2 million from 80,000 which is nearly $2.2 billion.
The rest of the reserved will be utilized for repaying remaining UST users. At first the smallest UST holders.
In the meantime, Kwon, CEO of Terraform Labs, has a controversial plan of restoring LUNA.
He proposed a plan of forking the blockchain of terra.
Fundamentally, this implies the formation of a new blockchain that is displayed on the past one, for certain key changes.
This new blockchain would be made close by many tokens of LUNA, which would be conveyed among current holders of LUNA and UST, and new terra applications’ fund development.
Maybe yielding the primary issue of tethering the stablecoin to UST, he has proposed to eliminate UST, already the blockchain’s fundamental selling point, from the ecosystem of Terra.
The ecosystem of the Terra app has many developers working hard at everything such as DeFi fungible work markets, cutting-edge foundation, and local area experience.
He said this, proposing this must be preserved at TerraUSD’s expense.
The most renowned fork in the history of crypto happened to Ether back in 2016.
After one hacker ransacked 3.6 million ether from a DAO, the developers of Ether forked this blockchain.
They made another chain that is identical in every way except for the reclamation of the stolen ether.
It created a rift inside their community, with some keeping up with the first chain right up 'til now, and called it Ethereum Classic.
The plan of Kwon is a sign of approval for that fork.
This new plan may be seeing the ongoing Terra blockchain to be renamed to Terra Classic.
This new chain will be basically going by Terra.
Can Terra return to $120 ever?
Terra has been preferred by many investors.
If you are looking to invest or trade Terra or any other cryptos check out the most safest trading platform Bitcoin smart
It has been listed among the top 10 most valuable crypto assets in the market.
For a long, it was seen to trade for more than $100.
Yet after decline periods, this coin settled at almost $40 this year.
All its value got wiped out after its UST stablecoin pegged to the dollar lost the peg.
LUNA crashed simply and now it is selling for a few pennies.
It will not be simple to return to all its glory.
Some little recovery was reported in the last few days.
There has been much volatility around LUNA to surely say that it will come back.
Many things that must be happening for giving LUNA all chance, did not happen yet.
UST is de-pegged still now,
The community of Terra is running out of different ways for defending the stablecoin.
If LUNA even returns to $10 it will be a huge miracle.
One can trade LUNA now. But you should not be holding it. As seen above, because of high volatility, this coin is wildly swinging. It will be giving short-term traders who are speculative a chance of winning big. Yet in the long term, LUNA is very risky now.