One of the hottest cryptocurrency projects faces a major test amid market turmoil
The price of Terra (LUNA) has fallen by more than 30% in one day, according to data from CoinGecko.
Image by coingecko.com
This comes after the UST stablecoin lost its peg and plunged to an intraday low of $0.932008. After attempting to recover, it continues to trade below the USD 0.94 level at the time of writing.
Terra’s most popular stablecoin hit its current all-time low of $0.85 on May 19, 2021.
UST is an algorithmic stablecoin, which means it maintains its stability using algorithm programming rather than centralized entities like Tether or Circle.
The Luna Foundation Guard (LFG), a non-profit organization founded by Terraform Labs, has: emptied a Bitcoin wallet with $1.4 billion to back the controversial stablecoin. It rushed to issue loans in both Bitcoin and UST to over-the-counter trading companies. Last week, the LFG became Bitcoin’s second-largest corporate holder (after only business intelligence firm MicroStrategy).
In addition, the Terra network already has some broadcast delays due to network congestion.
UST has now surpassed its sister token in market cap. The two are valued at $17 billion and $15.9 billion respectively.
As reported by U.Today, the stablecoin also briefly lost its pen on Sunday, but the decline was less dramatic.
A huge sale
As reported by U.Today, Bitcoin plunged to the $30,000 level earlier today for the first time since July 2021.
MicroStrategy’s huge holdings are now in the red, fueling fears that the market could face a major crisis.
Meanwhile, the Nasdaq Composite Index had its worst start to the year in history.