Crypto investors never thought they had to ask TerraUSD (UST) or Luna Will reach $1 first. On May 11, the issue became a talking point in the crypto space as the Terra ecosystem collapsed.
As the algorithmic stablecoin UST loses its peg to the dollar, falling to lows around 30 cents, Terraform Labs co-founder Do Kwon Share his rescue plan on Twitter. Meanwhile, the value of LUNA, the sister token of once the top 10 cryptocurrency project by market capitalization, plunged more than 98 percent to 84 cents, according to CoinMarketCap. FYI: LUNA was trading above $120 in early April.
Amid the confusion, Cointelegraph analysts Sam Bourgi, Jordan Finneseth, Marcel Pechman and Benton Yuan held an emergency edition of the Market Report, which usually airs on Tuesday, to discuss exactly what happened.
Bourgi explains the rationale for algorithmic stablecoins and the risks inherent in them before dissecting how UST loses its peg. Remember all the excitement surrounding Bitcoin with the Luna Foundation Guard (bitcoin) Buy? That’s one of the biggest red flags, Bourgi said.
Finneseth breaks down the market psychology of the crash and why investors can expect more pain in the months ahead. Meanwhile, Yuan discussed some potential theories about who might be responsible for orchestrating the BTC dump that sparked panic within the Terra ecosystem.
Pechman stayed put, putting the LUNA crash in the context of the global financial system and concluding that cryptocurrencies and Bitcoin are still the best assets.
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The views, thoughts and opinions expressed here and during the show are those of analysts only and do not necessarily reflect or represent the views and opinions of Cointelegraph.