There is no way to sugarcoat this – the cryptocurrency market is facing its worst crisis of 2022. The carnage began on Wednesday after Bitcoin fell below $29,000. The following day, Terra Luna, the cryptocurrency linked to TerraUSD (UST), suddenly collapsed overnight, losing 99% of its value as crypto investors lost their savings.
Terra, which was among the top 10 most valuable cryptocurrencies, fell from its $120 peak last month to below $1 on Wednesday.
Then, this morning, the situation got even worse. CNBC has now reported that Luna is now worth $0 as UST dramatically lost its $1 peg, leading Binance, the world’s largest crypto exchange, to temporarily delist UST and LUNA. Terra’s Luna is a stablecoin designed to support UST’s one-to-one peg to the US Dollar. UST is not alone. Tether, the world’s largest stablecoin, also fell below the $1 mark as the crypto carnage continues.
According to data from CoinGecko, Luna crashed to $0 on Friday morning. “The sister token of controversial stablecoin TerraUSD is now essentially worthless,” CNBC noted.
Hoping the controversial stablecoin and token would bounce back quickly, some investors began “buying on a dip” only for the price to keep falling. In a post on Twitter, a crypto investor by the name of ASH WSB reported that he lost $150,000 after buying the Luna dip. “I lost over $150k trying to catch the dip for $LUNA,” he tweeted.
I lost over $150,000 trying to catch the dip $LUNA
— Ash WSB (@ashwsbreal) May 12, 2022
The demise of controversial stablecoin venture Terra has caused a meltdown in the crypto market, wiping out billions of dollars in value in a single day.
TerraUSD or UST is said to be pegged one-to-one to the US Dollar. However, UST has lost its peg and was trading at around 12 cents on Friday, according to data from CoinGecko.
Just last week we wrote about The Luna Foundation Guard (LFG) after the company behind TerraUSD (UST) stablecoin acquired $1.5 billion worth of Bitcoin to bolster reserves of its popular stablecoin. LFG is a subsidiary of Terraform Labs, a technology startup founded by CEO Do Kwon.
According to a report by CryptoSlate, Do Kwon is hiding from the public eye after an unknown person knocked on his front door asking for him. Kwon quickly fled the scene and local police have now launched an investigation. Another post on Twitter confirmed the report that Kwon’s spouse has now applied for police protection.
CURRENTLY AT: #terra CEO Do Kwon’s wife has requested police protection after an unidentified person visited her home and rang the doorbell.
— Watcher.Guru (@WatcherGuru) May 13, 2022