Home Latest News Will Luna recover from the crypto crash? Terra Luna price prediction after...

Will Luna recover from the crypto crash? Terra Luna price prediction after cryptocurrency market slump – iNews


Luna is showing no signs of recovery following its dramatic crash that wiped billions from investors’ wallets.
The coin, which was valued at over $100 little over a month ago, is now worth just a fraction of a cent. It is trading at $0.00015 as of Friday morning.
The crash had a knock-on effect on Bitcoin and other major cryptocurrencies, and the market is yet to recover.
Here’s everything you need to know about it, and what experts predict could happen next.
Luna and TerraUSD (UST) are both native tokens of the Terra network, a blockchain-based project developed by Terra Labs in South Korea.
CoinDesk explains: “The Terra blockchain is built on Cosmos SDK; a framework that allows developers to create custom blockchains and build their own decentralised applications on top of Terra for various use cases.
“As of now, The Terra ecosystem contains more than 100 of these natively built projects. These include non-fungible token (NFT) collections, decentralised finance (DeFi) platforms and Web 3 applications.”
The goal of Terra is to be a peer-to-peer electronic cash system.
It aims to do this through the use of “stablecoins”, which are cryptocurrencies pegged to a real-life currency.
UST is pegged to the US dollar, which means one UST is supposed to be worth around the same as one dollar. Luna plays a vital part in this.
CoinDesk explains: “Instead of relying on a reserve of assets to maintain their peg, UST is an algorithmically stabilised coin. This involves using a smart contract-based algorithm to keep the price of UST anchored to $1 by burning (permanently destroying) Luna tokens in order to mint (create) new UST tokens.”
In the Terra ecosystem, users are meant to always be able to swap the Luna token for UST, and vice versa, at a guaranteed price of $1 – regardless of the market price of either token at the time.
Essentially, the crash happened because the Terra network stopped working as it should.
UST lost its peg to the US dollar and its value began to fall. There is no official word yet as to why this happened.
This led to the algorithm issuing more and more Luna coins to try and recorrect. However, it went into overdrive, and this caused serious problems.
CoinDesk analyst George Kaloudis explained: “The total supply of Luna went from about 725 million tokens on 5 May to about 7 trillion on 13 May. Meanwhile, Luna lost 99.9 per cent of its value. This is what hyperinflation looks like.”
Suddenly there were trillions more Luna tokens than previously existed, and the more of something there is, the less valuable a single one is.
The only way for Luna’s value to recover to anywhere close to its former price, would be to burn large amounts of the supply, to bring it back down to pre-crash levels.
Terra has said this is part of the recovery plan, but it may not even be possible.
Terraform Labs founder and CEO Do Kwon said: “What we should look to preserve now is the community and developers that make Terra’s blockspace valuable – I’m sure our community will form consensus around the best path forward for itself, and find a way to rise again.”
Michael Kamerman, CEO of online trading platform Skilling, told The Independent: “The UST and Luna situation, along with the big recent BTC dips, are a clear example of how anything can go wrong in the volatile world of cryptocurrency.
“This by no means signifies the end of crypto, especially as we are seeing more and more brands and retailers accept bigger coins such as BTC and Solana (SOL) as payments. However, the crypto world can be unforgiving, as those who invested in Luna and UST are finding out. Therefore it is absolutely essential for retail traders to ensure they do their due diligence when trading something as volatile as crypto.”
People invest at their own risk and cryptocurrencies are not regulated by British financial authorities.
All crypto investments are risky, but meme coins like Shiba Inu are particularly volatile, and you should be prepared to lose everything you invest.
The Financial Conduct Authority (FCA) warned in January: “Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money.
“If consumers invest in these types of product, they should be prepared to lose all their money.”
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown previously explained the risks to i.
She said: “On top of being extremely volatile, most cryptocurrencies are unregulated, which not only adds another layer of uncertainty but also means that investors have little or no protection against fraud.”
All rights reserved. © 2021 Associated Newspapers Limited.


Previous articleGoogle Search Console reporting issue with News performance report – Search Engine Land
Next articleApple to release laptops with new M2 chip – Economic Times
He is well known among his circle for his incredible attraction towards smartphones and tablets. Charles is a python programmer and also a part-time Android App developer.