Just Days After Launch, Terra Luna 2.0 Has Turned Into A Gambling Coin With Wild Price Swings.
On Saturday, Terra Luna 2.0 was airdropped to the holders of the previous version of Terra now named Terra Luna Classic (LUNC) and stablecoin UST. At the start, things seemed alright as investors hoped to recoup their losses after LUNC and UST crashed and sent the prices to zero.
Bloomberg reports LUNA 2.0 was supported by various crypto exchanges and this worked to fan up confidence in it. However, things started going downhill right after the airdrop. The coin’s price has been on a rollercoaster ever since, starting from the highs of $17 on Kraken swinging between $30 to the lows of $3. OKX listed an opening price of $1, with extremes of $20 and $5. On Binance the coin started from $18 and is now trading around $8.
A look at the charts on Coinmarketcap shows that Terra Luna is currently trading at around $7.12.
Luna 2.0 Trading On Narrative
Analysts have been trying to understand why Luna 2.0 has experienced these upheavals for the last few days. It now turns out that the coin has been trading on a narrative spreading among holders.
Some investors don’t trust Terra anymore and are willing to sell off their stash to recoup at last a fraction of their initial investments in UST and LUNC. This dumping creates a shift in the market and drops the price.
On the other hand, there are those who are willing to hold on to their stash, hoping that Terra will work to win back the community’s confidence and eventually build up the coin’s price.
Either way, the crypto seems to have turned into a gambling coin with everyone trying to make a profit as soon as possible.
Fadi Aboualfa head of research at Copper, a crypto brokerage firm told Bloomberg:
“This is pure gambling like crypto has never seen before. One of the most important things about crypto is the brand or marketing and community, Terra has burned its community, and its brand is tarnished. Whatever they do here is going to be pointless.”
Thomas Dunlevy said,
“This initial volatility just shows to me that Luna 2.0 is now a speculative asset, and will likely trade on narrative until they can regain the trust of builders to bring fundamental value to the new ecosystem.”
Thomas is a research analyst at Messari, a firm that deals with crypto-related data.
Flawed Airdrop
Perhaps one factor that may have contributed to this mayhem is the improper LUNA 2.0 airdrop conducted by Terra. There have been numerous claims by users who got less compensation compared to their UST and LUNC holdings. Terra has already acknowledged this mishap and promised to come up with a solution. Still, it appears that a lot of people in the community may have lost some confidence in Do Kwon’s team. Whether this will change or not will depend on how Terra handles situations in the near future.
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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