Today is a sad and tumultuous day for cryptocurrency investors, and enthusiasts as the price of the LUNA coin hits the slopes.
Concurrently, the LUNA cryptocurrency has been losing a greater part of its value this week. On Tuesday, 50% of its value was lost. Today, the second arrow hit deeper. Over 90% has been lost by the crypto company.
Many have expressed contempt and displeasure over the sudden drop. The drop has been attributed to Terra’s stable coin ecosystem. The stablecoin current price pegs at $1. It led to investors pulling out existing funds from the crypto space.
Weeks ago, LUNA was in one of the top 10 positions in cryptocurrency according to its market cap. Following its depreciation, its market cap has gone down to $2 million, while its current position is 38th in the world Crypto index.
LUNA has lost over $25 million in the capital between three days.
Meanwhile, the LUNA foundation, a non-profit organization headed by CEO and co-founder Do Kwon aided the deployment of 42,500 BTC to help upholster the staggering economy.
Though every attempt proved avail, they also seemed to have $1 million collateral from market controllers, which also ended at a crossroads.
A premeditated plan?
Some believe that this event could be a premeditated attack by people hoping to see the downfall of the Terra company.
A recent tweet by a Twitter user who is a well-known crypto analyst on Twitter under the name of “Onchain Wizard” talked about how the attack on the group was probably implemented.
The crypto analyst explained that the possible attacker probably borrowed 100,000 BTC which was sold into LFG to fund the UST Reserve Fund. The attacker created a $1billion position flagship using the Terra stable coin.
Hope for Terra?
In a statement, this morning, Do Kwon stated that a new project would immediately take effect, which would mint LUNA in a bid to engulf and absorb excess UST in circulation and the sell-out pressure.
Investors don’t see this as a feasible plan. Their reasons are valid because even if the plan works out, the company may not have the backing of dominating crypto shops such as Pantera and Galaxy.
They have all expressed uncertainty and fear in plunging money into the proposed project.
In a viral tweet, the CEO, Do Kwon said, “ Naturally, this is at a high cost to UST and LUNA holders, but we will continue to explore various options to bring in more exogenous capital to the ecosystem and reduce supply hangover on UST.”
Following the spiral between UST and LUNA, the US treasury secretary Janet Yellen has proposed a notion for the regulation of stable coins before the year ends. Other stable coins like the USD coin and Tether are still maintaining their price.
This is the lowest drop LUNA has ever experienced since 2021. The company has rather expressed optimism and hope that the incident will be a thing of the past.