Bitcoin price crash news – Terra Luna crytocurrency collapses 98% overnight as fans 'lose life savings'

THE PRICE of the Terra (LUNA) cryptocurrency has fallen by more than 99 per cent.

Terra's crash, which ranked among the top 10 most valuable cryptocurrencies, has now seen the fortunes of crypto investors wiped out.

The dramatic crash meant its market cap dropped from above $40bn (£32bn) to just $500m (£409m) – resulting in unprecedented losses for those who cashed in on it.

The majority of the losses were realised overnight – with a 98 per cent price fall in the space of just 24 hours.

Do Kwon, the founder of Terraform Labs, announced on Twitter on Wednesday amid the crash that he has a recovery strategy for the Terra tokens that he will release soon. 

Many speculations are also being made that Terraform Labs is in touch with several investors to bring the cryptocurrency back on track. 

Crypto is much riskier than other investments because they are highly volatile – their price often rises and falls very quickly, sometimes seemingly for no reason.
Many cryptocurrencies have a short track record, making them difficult to understand and predict.

This type of investment is also not protected by the regulator which means you have no protection if things go wrong.

Read our Bitcoin live blog below for the latest news and updates…

  • Milica Cosic

    Why have crypto markets been down?

    Cryptocurrencies have been especially volatile lately and there a few reasons why.

    Twitter's chief financial officer Ned Segal said at the end of last year that investing in crypto "doesn't make sense right now", causing concern among Silicon Valley buyers.

    China also announced plans to clean up virtual currency mining, according to CNBC.

    Many crypto-mining regions in China are now radically reducing operations.

    Previous moves by the country to crackdown on mining and trading of crypto has previously sent markets plunging.

    And the unrest in Eastern Europe has contributed to the fall because investors tend to shun risk-sensitive assets during uncertain times.

  • Milica Cosic

    Luna price prediction

    Luna has dropped more than 97% this week, from a seven-day high of $87.80 to $2.55.

    Nevertheless, Wallet Investor predicts that Luna will regain its losses and hit new highs before the end of the year.

    PricePrediction.net expects Luna's price to average $182 next year, and $265 in 2024.

    These price predictions are far from guaranteed though, so you should always do further research and proper analysis.

    Luna's founder is attempting to secure additional funding to help restore UST to $1, but that involves selling Luna at a 50% discount in the short term, Javier said.

    "Over the long term, the success of that plan could help restore confidence in the market. Whether that plan succeeds is the big question mark.

    "Until then, I wouldn’t be one of those looking to catch a falling knife by jumping into Luna," Javier said.

    We've also revealed price predictions for other cryptocurrencies including Bitcoin, Dogecoin, Shiba Inu, dYdX, and EO.

  • Milica Cosic

    In depth: What is Luna? (2/2)

    Theoretically, this process is supposed to make Luna more valuable as it becomes more scarce, and keep the price of UST from moving above its $1 benchmark.

    A drop in UST price created an unstable market for the stablecoin, however.

    "The slump in the Luna is tied to the selloff that ensued after millions of tokens were issued to restore UST’s 1:1 peg," Finder.com markets editor Luzi Ann Javier told The Sun.

    "Stablecoins were supposed to shield investors from the gyrations in the crypto market with its peg to the dollar.

    "When that peg was broken, it shook investor confidence not just in stablecoins but across decentralized finance."

    Luna broke $1 for the first time in January 2021 and struggled to break past $35 until July.

    From there, the price of Luna tumultuously climbed to new peaks every few months before cratering this week.As a result of Luna's price collapse, UST dropped to $0.55 after sitting consistently around $1 since January 2021, according to CoinMarketCap.

  • Milica Cosic

    In depth: What is Luna? (1/2)

    Luna, also known as Terra, is one of two major coins created by Terra Labs, a South Korean company.

    The Luna Foundation Guard, the organization that supports Luna's price, has nearly 30,000 bitcoins in reserve to back the stablecoin, according to Bitcoinist.

    The other coin from Terra Labs, TerraUSD or UST, is linked to Luna.

    According to Coindesk, the price of UST is "algorithmically stabilized" through smart contracts involving its sister coin.

    UST is pegged at $1 through a process of destroying Luna coins and minting UST.

  • Milica Cosic

    Link to increased interest rates?

    Terra is at risk of a downturn as market participants grow fearful about the global economic outlook.

    The fall commenced today after the Bank of England increased U.K. interest rates from 0.75% to 1% and predicted 10% inflation by the end of the year. On the same day, the Luna Foundation Guard made its biggest Bitcoin purchase yet, adding 37,683 Bitcoin to its reserve fund.

  • Milica Cosic

    ‘I lost my life savings’ 

    Following the crash, one member of the r/TerraLuna sub-Reddit wrote “I lost all my life savings”. 

    “Had bought Luna at $85, not sure what to do.”

    Another wrote that they had lost $15,000 after failing to sell their holdings for a substantial profit when it was trading above $100 last month.

    “I should’ve cashed out when it was $100, then I would have been up $25,000,” wrote Reddit user No-Forever. 

    “But I got greedy hoping to get more money so I can at least afford a downpayment for a house for my family. I guess no house and savings then.”

  • Milica Cosic

    ‘Close to announcing a recovery plan’

    Do Kwon, who founded Terra creators Terraform Labs, tweeted on Tuesday: “Close to announcing a recovery plan for $UST. Hang tight.”

    He followed this up with a Twitter thread on Wednesday, asking for patience from the community.

    “I understand the last 72 hours have been extremely tough on all of you – know that I am resolved to work with every one of you to weather this crisis, and we will build our way out of this,” he wrote.

    “The Terra ecosystem is one of the most vibrant in the crypto industry, with hundreds of passionate teams building category defining applications within… Terra’s return to form will be a sight to behold.”

  • Milica Cosic

    Could be back on track soon

    Do Kwon, the founder of Terraform Labs, announced on Twitter on Wednesday amid the crash that he has a recovery strategy for the Terra tokens that he will release soon. 

    Many speculations are also being made that Terraform Labs is in touch with several investors to bring the cryptocurrency back on track. 

  • Milica Cosic

    What is Terra Luna? 

    Terra is a blockchain protocol that supports price-stable global payment networks by using stablecoins backed by fiat currency. 

    Terra, according to its white paper, combines the price stability and widespread adoption of fiat currencies with the censorship-resistance of Bitcoin (BTC) and offers rapid and low-cost transactions. 

  • Milica Cosic

    Terra Luna has crashed 

    THE PRICE of the Terra (LUNA) cryptocurrency has fallen by more than 99 per cent.

    Terra's crash, which ranked among the top 10 most valuable cryptocurrencies, has now seen the fortunes of crypto investors wiped out.

    The dramatic crash meant its market cap dropped from above $40bn (£32bn) to just $500m (£409m) – resulting in unprecedented losses for those who cashed in on it.

    The majority of the losses were realised overnight – with a 98 per cent price fall in the space of just 24 hours.

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