As LUNA continues its free fall, cryptocurrency users have expressed concerns about the massive dip’s ripple effect on the entire market.
In what may seem like a rug pull for Terra (LUNA) investors, the cryptocurrency has suffered one of the worst losses since it was created, as it continues to see a huge chunk of its value evaporate into thin air.
LUNA’s Recent Performance
LUNA, which had a market capitalization of over $40 billion a month ago, has recorded a significant loss of nearly $39 billion in the hours leading to press time.
As of April 5, 2022, LUNA had a market capitalization of above $41 billion, ranking it in the top 10 cryptocurrency rankings. For most of April, LUNA ranked as the eighth-largest cryptocurrency by market capitalization, with a unit of the coin valued at around $115 at the time.
However, LUNA is far from its glory days, as the token has plummeted to a low of $4.37 earlier today, with many of its short-term investors converting their holdings to stablecoins.
At press time, LUNA was changing hands at around $5.65 and ranked as the 33rd largest cryptocurrency, with a market cap of $2.7 billion.
Although the entire cryptocurrency market has been on the back foot lately, LUNA’s capitulation results from investors’ lack of trust in the Terra team, following recent developments that came up in relation to the company’s claims that Bitcoin backs its stable coin TerraUSD (UST).
LUNA is not the only Terra token that has suffered greatly. UST, the stablecoin that is supposed to be pegged to $1.00, fell to a low of $0.31 earlier today.
People Lament the Effect of LUNA Dip on Cryptos
The unfortunate incident is still a major shock to the cryptocurrency community. Many continue to ponder the effects of this tremendous loss in LUNA’s value on the entire cryptocurrency industry.
A cryptocurrency investor, who goes by the pseudonym Altcoin Psycho, took to the microblogging platform Twitter to lament the massive dip in LUNA and its effect on the entire crypto, saying:
“39 Billion dollars has been erased from Luna’s Market Cap in the last 5 weeks. Still, in awe at the magnitude of this and the massive ripple effects, it will have on crypto.”
39 Billion dollars has been erased from Luna's Market Cap in the last 5 weeks.
Still in awe at the magnitude of this and the massive ripple-effects it will have on crypto pic.twitter.com/nlUIEtOynQ
— Altcoin Psycho (@AltcoinPsycho) May 11, 2022
Responding to the post, another crypto enthusiast noted that the massive decline in the value of LUNA would prompt the public to steer clear of crypto-related investments.
Honestly will make the general public steer clear from it ???
— KSICRYPTO (@ksicrypto) May 11, 2022
Not So True
It is common knowledge that people are always scared to invest in any financial instrument filled with sad stories, just like the LUNA incident.
However, things are expected to change as soon as the cryptocurrency market stabilizes, and things get back to normal.
Terra’s team is already working round the clock to change the situation for the better as they continue to seek ways to raise funds to bolster further the assets backing the UST stable coin.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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