May 13, Luna – A crash of cryptocurrency raises concerns around the world. The nonprofit’s cryptocurrency reserves have fallen from about 80,000 to about 300, according to a statement from the Luna Foundation Guard (LFG). As a result, some investors were exposed to volatile market conditions
Industry experts attributed the fall in lunar prices to token whale dumping – which refers to participants such as foreign institutional investors who are bulk buyers and sellers – as it leads to panic around retail investors. “The question is about the ability of blockchain technology to handle such changes in market sentiment. Although the algorithmic stability of stablecoin cannot be blown away, technology needs to be resilient in such situations. Ignite, a blockchain development company, says developer relationship engineer.
Moreover, TerraUSD’s (UST) – a stablecoin built on the Terra blockchain downfall did not affect the price stability of other stablecoins related to the Fiat currency. Despite the impact caused by the devaluation of the UST, stablecoins were supported by investor confidence through the involvement of fiat currencies such as the US dollar. “Because investors did not value the UST more than 2 2 billion and sold them, the value of the UST has dropped from about one dollar to 91 cents. Although speculators tried to take advantage of the situation by converting 90 cents UST into one-dollar luna coins, it further eroded the value of the lunar currency, ”said Pratik Gauri, founder, 5ire, a blockchain platform.
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Interestingly, according to various reports, just before the fall, the demand for lunar also increased. This is related to the previous increase in the value of Terra. Raghav Gupta, founder of EquiDEI, a decentralized financial company (DeFi), said the spikes were due to the accumulation of terra price to earn extra from related investments. “It’s always a matter of supply and demand between terra and lunar prices. As a result, demand for these stablecoins has increased and their prices have dropped by 80%. From this whole situation, I realize that, like any other investment option, cryptocurrency investing requires careful study, planning and implementation, ”he added.