Image: LUNA/USDT 1 Day chart showing the key levels (Source: Tradingview)
The price of Terra (LUNA), which peaked near $120 in April and ranked among the top 10 most valuable cryptocurrencies, fell by 98 percent in 24 hours to less than $1 on Wednesday, and some investors say they’ve lost their entire life savings.
TerraUSD (UST) — an algorithmic so-called stablecoin and sister to Terra (LUNA) — that should always be worth $1, lost its peg to the U.S. dollar on Monday, May 9, and fell to as low as $0.29. UST was trading at $0.61 as of this writing.
LUNA is tied to the price of UST and is used to “stabilize” UST’s dollar peg.
TerraUSD (UST) stablecoins track the price of fiat currencies like the U.S. dollar and euro, while Terra (LUNA) is used for blockchain governance.
Both are native tokens of the Terra network, a blockchain-based project developed by Terra Labs in South Korea. The Terra blockchain allows developers to create custom blockchains and build their own decentralized applications for various use cases. As of now, The Terra ecosystem has more than 100 natively built projects including non-fungible token (NFT) collections, decentralized finance (DeFi) platforms and Web 3 applications, Coindesk reported.
A post moderator on the sub-Reddit forum u/TerraLuna, which has 44,000+ members, posted links to helplines around the world, including the National Suicide Prevention Lifeline after users voiced concern about the consequences of the crash. “I lost over $450,000, I cannot pay the bank,” a member wrote. “I will lose my home soon. I’ll become homeless.”
“For everyone panicking, here are some National helpline numbers,” the title reads.
LUNA’s dramatic downfall sent its market cap crashing from more than $40 billion to $74.2 million as of this writing, with unprecedented losses for investors in a leading cryptocurrency.
“I have now lost $1,8 million in $LUNA,” tweeted Carl Runefelt, who is known as “The Moon” on social media and listed in Forbes 30 Under 30, in a May 12 message to his 1 million followers. Runefelt built a portfolio of wealth through Bitcoin and crypto assets, positioning himself as a leading crypto authority. He is the co-founder and CMO of Kasta, a blockchain alternative to mainstream mobile payments, and has the largest crypto analysis channel on YouTube with 550,000-plus subscribers.
Analyst and investor Crypto Future responded to Runefelt, tweeting, “You made tens or hundreds of millions in other trades, ur current loss is a small percentage of ur portfolio …most of the people u r addressing have lost a significant percentage of their portfolio”.
Remi Tetot, a Harvard Business School graduate and head of research at Global Macro Investor since 2012, tweeted, “Like many of you I have been wiped out, I am not going to lie it hurts, l lost 100% of my capital invested in crypto. I didnt sell ONE $Luna on the way down to not add selling pressure in distressful time.”
On the sub-Reddit forum r/terraluna, u/CryptographerTop8162 posted a discussion to the community with the title, “My ex-colleague attempted suicide.”
“My friend and ex-colleague (my manager for 15 years) tried to commit suicide this morning. He basically moved all of his savings to crypto in 2021 and LUNA was a massive player in his portfolio. Just wanted to tell you guys – if you feel pain and you think your life is miserable without money, you feel failure and stuff… just come to people you love. Do not be alone, this shit is getting serious. Do not overestimate the value of money, life has a much higher value. I do not post to reddit at all, but I considered it important to do it now. Wish you good luck.”
Other Reddit users like MeadowcrestRPGMV3D tried to offer consolation to people who borrowed money to invest in failed assets. “Please everyone here, remember a debt proposal or bankruptcy will have you paying fractions of what you owe.”
On Coinmarketcap’s live terra chat, @bexcrypto reflected on the possible impact LUNA’s fall will have on the entre crypto industry.
“In my opinion if $LUNA & $UST and not recover no one will TRUST all Crypto project even $BTC cause this project was one of best project so what happened in $UST WILL Happened in All like $USDT $USDC $BUSD and no one will trust crypto any more”.
Citing congestion and high volume of pending withdrawals, leading crypto exchange Binance temporarily suspended withdrawals on the Terra (LUNA) network at one point, stopping even those who wanted to sell from doing so.
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Do Kwon, the founder of Terra creator Terraform Labs, tweeted on Tuesday: “Close to announcing a recovery plan for $UST. Hang tight.”
In a follow-up on Wednesday, he asked for patience.
“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,” he wrote.
“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.”
Image: LUNA/USDT 1 Day chart showing the key levels (Source: Tradingview)
