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HomeCrypto NewsMarketExperts Say Terra 2.0 (LUNA) Has No Future-Bloomberg

Experts Say Terra 2.0 (LUNA) Has No Future-Bloomberg

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Experts See No Future For Luna 2.0 – Is The Terra Community Totally Done?



Back in early May, the Terra ecosystem collapsed, sending UST and Luna into a downward spiral. Luna’s price fell from over $100 to below a penny. UST lost its USD peg and inflicted even more pain on its holders. Basically, UST has become worthless. Even Terra’s developer team at TFL and founder Do Kwon seem to have abandoned it.

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The launching of Terra 2.0 with newly minted tokens, dubbed Luna 2.0, hasn’t seen much success either. The new coin traded at a fairly good price at the beginning, recording around $19 in price. That’s before things went south the token’s price fell continuously, all the way down to the current $2.9 (as shown on CoinMarketCap).

Terra Under Probe

The woes mounting on Luna 2.0 may be related to the baggage that came with the collapse of the original Terra Luna and UST. Do Kwon and his company are currently under investigation both in South Korea and the US.

In South Korea, the authorities are probing TFL employees for what they term the embezzlement of the BTC reserves that were meant to prop up UST and maintain the USD peg. Do Kwon and TFL are also charged with tax evasion amounting to close to $80 million. In the US, TFL and Do Kwon are under investigation in connection to UST’s status. The US SEC wants to establish whether UST was issued as illegal and unregistered security.

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What Expert Says:

Bloomberg recorded four experts’ opinions and said terra 2.0 is done and has no future.

The experts have come forward to offer their opinions about the current and future prospects regarding the new coin, Luna 2.0:

The founder of Quantum Economics, Mati Greenspan, is of the opinion that Luna 2.0 was never meant to grow. It was just a way for the heavy investors affected by the UST and Luna crash to recoup a fraction of their investments. There’s no identifiable factor to push up the price of Luna 2.0.

“Luna 2 was never meant to survive, it was simply a mechanism for some who were heavily invested to recoup some of their losses at the expense of new money coming in from the hype. I don’t see any reason for the price to go up ever.” 

Another analyst working at Messari, Kunal Goel, says that Luna 2.0 will find it hard to survive since it was created during a bad market environment (the bear market). The original Luna derived its value from being linked with UST. Luna 2.0 doesn’t have that backing. Also, the legal issues currently surrounding TFL and its founder aren’t helping.

“Terra 2.0 suffers from multiple problems. It has gone live in an unfavorable macro and crypto environment. Without an algorithmic stablecoin, it has no clear point of differentiation from other smart contract platforms. Finally, the regulatory overhang is a key concern in investors’ minds.”

Riyad Carey, an analyst at Kaiko, thinks Luna 2.0 and Terra 2.0 will have a hard time penetrating a market where big players like Ethereum, Avalanche, and Solana, are already established. Also, the loss of the UST link and lack of a burning mechanism is a negative factor in Luna 2.0.

“Luna 2 will have a difficult time distinguishing itself in a crowded L1 ecosystem with large players like Avalanche and Solana and of course Ethereum. While the original Terra had a fairly robust ecosystem, much of that activity was centered around UST and aUST (UST earning yield in Anchor). Additionally, some of the price action was based around the burning of LUNA to create UST. So now Luna 2 doesn’t have this mechanism, will be facing inflation in the form of vesting/unlocks, and obviously has the baggage of being tied to the largest ever crypto collapse. So it will definitely be a tough path forward.”

According to the CEO and founder of KoinBasket, Khaleelulla Baig, TFL and Do Kwon have lost credibility in the industry and now everyone is looking to ditch Luna 2.0.

“Everyone wants to exit the new Luna as the founder Do Kwon has lost credibility among the community. Luna has no future. The founder didn’t build firewalls around the algo even when they had an opportunity to do so. That’s why they have lost credibility. Building the new Luna within the existing community will not make any sense now. Smart money will move to fundamental coins from such risky coins.”

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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Author

Ammara
Ammarahttps://thecryptobasic.com/
Ammara Mubin is a cryptocurrency reporter and trader with vast experience in the industry. Mubin has written several news stories related to the crypto industry, including non-fungible tokens (NFTs), decentralized finance (DeFi), fundraising, mining, etc. Her major focus is covering regulatory events that are capable of shaping the entire crypto ecosystem.

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