Reign of Terra Luna! Terra Luna becomes the 58th largest cryptocurrency on CoinMarketCap during Friday’s session. In the last 24 hours, the Luna token has recorded more than 200% upside and outperformed the broader market. Investors of the Terra community have made strong buying of Luna on the proposal of 1.2% tax burn of the Terra Classic (Lunc) network. Major crypto exchanges have supported Terra’s tax burn plan.
At the time of writing, on CoinMarketCap, Luna is performing at $5.96 up by 206.07%. Its weekly upside is around 216.37%. The token’s market cap is more than $3.10 billion. In the past 24 hours, the token has clocked the day’s high of $6.91.
From its all-time low of $1.53 on August 29 this year, Terra LUNA has made a strong gain of overall nearly 352% in the last 24 hours.
Overall, the token even outperformed major crypto leaders like Bitcoin and Ethereum who have risen by over 9% and nearly 5% respectively. There is a broad-based buying among cryptocurrencies that pushed the global crypto market cap to $1.04 trillion.
Dileep Seinberg, Founder & CEO, MuffinPay, Bill Payment & Utility Crypto said, “Luna Classic (LUNC) has almost doubled in the last week. A “tax burn” regime that aims to reduce the token’s hyperinflated supply is likely fueling the rally.”
Terra received approval for a 1.2% tax burn for on-chain transactions of LUNC and USTC on the Terra Classic network. These proposals are being developed to change the tax parameter from its current value of 0 to 0.012 (1.2%).
According to Terra governance, the 1.2% tax will be applicable on all currency denominations currently available on-chain, including LUNC and USTC.
Terra’s 1.2% tax burn goes live on September 20 at the Terra Classic block height of 9,475,200 after the proposal is submitted.
On Friday, currently, the Terra Classic Lunc which entered the top 30 cryptocurrency list yesterday, was trading at $0.0004657 lower by 13.4%.
Crypto exchanges Huobi And BTCEX are the latest to support Terra’s 1.2% tax burn plan. Other exchanges like MEXC Global, Kucoin, and Gate.io have also announced their support. However, the world’s largest crypto exchange in terms of trading volumes, Binance has decided to not apply for Classic’s tax burn plan.
On Thursday, Binance in its notification said, “Binance will review and amend the minimum withdrawal amount, maximum withdrawal amount, and withdrawal fees for LUNC and USTC via Terra Classic network.”
For deposits, Binance notified that transactions will be taxed by the Terra Classic network before it reaches Binance. The balance will be credited to your Binance account after the 1.2% tax deduction by the network.
Meanwhile, for withdrawals, Binance stated that the users will receive the withdrawal amount minus withdrawal fees charged by Binance and the 1.2% tax deduction by the network.
Amidst the flash crash of Terra USD and old Luna, in May this year, Terraform Labs co-founder Do Kwon launched Terra 2.0, under which, the original Terra chain has been rebranded as Terra Classic. While a new chain called Luna was created with the existing name Terra and made available for trading.
A few months ago, the hype in Terra tokens was all about USTC and old Luna’s crash that wiped out reportedly $40 billion in wealth. The fear emerged in mid-May when Terra’s USD erased its peg of $1. This led to a deep free fall in both Terra sisters with old Luna tokens collapsing to zero levels. Investors, exchanges, and firms that were great believers in Terra USD in the early months of 2022 saw their wealth evaporate. The impact of Terras in mid-May led to an intense liquidity crunch and the industry is still trying to breathe through it. Since the launch of Terra 2.0, the tokens have been volatile, however, picked up momentum since last week.
It makes one wonder whether the current skyrocketing performance of Terra tokens is the beginning of a promising bull run. Or a prospect of bear run in disguise?
Where are Terra tokens headed?
Rajagopal Menon, Vice President, WazirX highlighted that recently Terra Luna Classic has gone from 10,000 points per coin to 12,500 points per coin. In May, the buzz was about why Terra Luna Classic was falling, whether it would ever be re-pegged and whether it would ever be able to stabilise the UST again. Then the debate slowly shifted to Terra Luna Classic vs Terra Luna 2.0, which one’s going to be better.
Menon added, “Now, the sentiment in the community has always been “Let’s build up Terra Luna Classic, let’s rebuild this community, “We are the LUNAtics, We are Strong”.
WazirX VP said, “On 26th August, staking has been re-enabled on the Terra Luna classic blockchain and Orion Money has officially downloaded version 22 to re-enable staking and include the burn tax. Investors are buying in anticipation of the price rising from around 8,000 points per coin to around 10,000 points per coin, then to 12,500 points per coin today.”
Going forward, Seinberg added, “At the current juncture, Luna remains a volatile trade. The new burn scheme will not significantly change the coin’s fundamentals. One should avoid such trades and enter only if they have a proper exit strategy during both upside and downside.”
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