Terra Luna stablecoin collapses 99% overnight as crypto investors lose life savings | tech news

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It’s a Wednesday bloodbath for cryptocurrency and stablecoins. Earlier today we wrote about the carnage in the crypto market after bitcoin fell to just over $29,000. Since then, the world’s most popular cryptocurrency has continued to fall to $28,555.90 at the time of writing. However, the collapse of the stablecoin Tera Luna does not receive much attention.

As you may recall, we wrote about The Luna Foundation Guard last week after the company behind TerraUSD (UST) stablecoin acquired $1.5 billion worth of Bitcoin to bolster reserves of its popular stablecoin. Terra’s Luna is a stablecoin designed to support UST’s one-to-one peg to the US Dollar.

A week later, the price of stablecoin TerraUSD (UST) has fallen more than 99 percent, wiping out the life savings of crypto investors as traders offload the cryptocurrency. Terra, which was among the top 10 most valuable cryptocurrencies, fell from its $120 peak last month to below $1 on Wednesday.

According to posts on popular aggregation platform Reddit, the bulk of the losses happened overnight, with prices dropping 98 percent in just 24 hours. The sudden crash meant Terra’s market cap dropped from over $40 billion to just $500 million, causing unprecedented losses for investors in a leading cryptocurrency

The collapse of Terra also sent shockwaves across the crypto market, causing billions in losses for Bitcoin and other currencies like Ethereum and Solana. The crash also caused mass destruction in ASTRO, ATOM, MARS, OSMO, and other DeFi-related protocols.

In a post on Reddit, a member of the r/TerraLuna sub-Reddit wrote, “I lost all my life savings. Bought Luna for $85 and wasn’t sure what to do.” No one knows if the sudden crash was due to a carpet pull. Meanwhile, moderators of the Reddit forum, which has more than 44,000 members, pinned a post with helpline numbers at the top of the page.

Another Redditor also wrote that they lost $15,000 after failing to sell their holdings for a significant profit when they traded above $100 last month.

“I should have cashed out when it was $100 and I would have gone up $25,000,” wrote Reddit user No-Forever. “But I got greedy, hoping to get more money so I could at least pay a down payment on a house for my family. Then probably no house and no savings.”

“I lost over $450,000, I can’t pay the bank,” wrote a Terra Forums user member. “I will lose my home soon. i will be homeless For me, suicide is the only way out.”

Just last week, UST, the largest algorithmic stablecoin by market value, had a market cap of around $18 billion.


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