Luna price crash explained: Why Terra Luna’s value is crashing and if experts think the crypto will recover
Terra (Luna), a cryptocurrency, has collapsed, losing more than 99 percent of its value.
On Wednesday, the coin’s value plummeted dramatically, falling from around $6.75 to just over $1.
It fell even further on Thursday, and is now worth only $0.02 as of Thursday afternoon.
Here’s what caused the crash and what you should know about the coin in the future.
What caused Luna to crash?
The crash of Luna was caused by its connection to terraUSD (UST), a stablecoin pegged to the US dollar.
Stablecoins are cryptocurrencies that are linked to traditional currencies.
UST decoupled from the dollar earlier this week, sending its price through the roof.
Luna’s market capitalization has dropped from $40 billion (£32.9 billion) to just over $200 million (£164 million).
On Wednesday, the leading cryptocurrency exchange Binance temporarily suspended withdrawals from Luna.
The coin’s demise comes amid a general cryptocurrency downturn, with many coins losing a quarter of their value in the last 24 hours.
Coinbase cited a “trend of both lower crypto asset prices and volatility that began in late2021,” but was quick to point out that these conditions are not expected to be “permanent.”
follow me to read more about cryptocurrencies → Abdul Rasheed
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