The price of the Terra (LUNA) cryptocurrency has plummeted by over 99 percent, sweeping out crypto owners’ riches. Around one stage, prominent crypto market Binance briefly banned Terra (LUNA) network withdrawals, preventing even those who needed to sell from doing so.
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Terra, one of the top ten most valued cryptocurrencies, fell under $1 on Wednesday after reaching a high of almost $120 last month. In the midst of a market-wide collapse, other coins seem to be in peril.
The brunt of the losses occurred overnight, with a price drop of 98 percent in just 24 hours.
The sudden meltdown saw its market cap plummet from almost $40 billion to only $500 million, triggering in catastrophic losses for cryptocurrency investors.
One contributor of the r/TerraLuna sub-Reddit stated, “I lost all my life savings.” “Had bought Luna at $85, not sure what to do.”
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Another user claimed to have lost $15,000 after failing to sell their stock for a significant gain when it was going 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.”
After users expressed worry about the crash’s consequences, moderators of the site, which has over 44,000 users, promoted a thread with helpline numbers to the top of the page. “I lost over $450,000, I cannot pay the bank,,” one forum user stated. “I will lose my home soon. I’ll become homeless.”
Around one stage, prominent crypto market Binance briefly banned Terra (LUNA) network withdrawals, preventing even those who needed to sell from doing so.
“High volume of pending withdrawal transactions… caused by network slowness and congestion,” the Cayman Islands-based exchange said.
The Terra crisis occurs during a wider cryptocurrency market downturn, with bitcoin dropping more than 50% from its all-time high of nearly to $69,000 in November, but the collapse of LUNA has been exacerbated by problems with Terra’s dollar-pegged stablecoin UST.
UST dissociated from the dollar previously this week, falling to as low as $0.29. Although many investors feel the project is finished, the Luna Foundation Guard (LFG), which serves as stewards for UST, is presently aiming to fund over $1 billion to resurrect the algorithmic stablecoin.
“Close to announcing a recovery plan for $UST,” Do Kwon, the founder of Terraform Labs, posted on twitter on Tuesday. “Hang tight.”
On Wednesday, he followed that up with a Twitter thread, appealing for the community’s patience.
“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.”