Up in flames: LUNA slips out of top 200 after losing 99.9% value as big money distances itself

  • LUNA has now dropped 99.9 percent of its value in the past two weeks to hit a new low and at $0.03, it’s not in the top 200 cryptos anymore.
  • Big money such as Citadel Securities and BlackRock has denied all links to UST and Terra even as Do Kwon, the project founder comes under scrutiny for his role.

Can anyone save LUNA anymore? A few days ago, many were confident that founder Do Kwon would come up with a plan, or that big money would swoop in and save the day or that even the market would self-correct. But now, the answer to this question seems to be a resounding no! LUNA has now lost 99.9 percent of its value and has sunk to $0.03 at press time.

In the past day alone, the cryptocurrency lost 98 percent of its value to slip from a high of $5.4 to now change hands at $0.031, putting its market cap at $78 million. For context, this is lower than Decentralized USD (USDD) a stablecoin project that launched just weeks ago on the TRON network.

At a time like this last week, LUNA was trading at $85 with a market cap of $30 billion, showing just how fast the market can turn.

Regulators take note, big money denies LUNA links

LUNA is the crypto that everyone is talking about, understandably so. As such, regulators have taken note. In a Senate hearing this week, US Treasury Secretary Janet Yellen brought up the woes of LUNA and its sister project UST

She told Senate:

I would note that there was a report just this morning … that a stablecoin known as TerraUSD had experienced a run and had declined in value. I think that simply illustrates that this is a rapidly growing product and there are risks to financial stability and we need a framework.

Yellen was responding to a question from Pat Toomey, the Senate Banking Committee’s seniormost Republican. On his part, Toomey told reporters that he believes crypto shouldn’t be judged on the merits of UST. He believes that UST is an outlier and that other stablecoin projects like Tether are much better off. As CNF has explained in the past, Tether, USDC, Binance USD, and other top stablecoin projects are backed by US dollars in reserve, unlike UST which is backed by smart contracts that link to a LUNA burn and mint mechanism.

Still, the Senator believes UST could very likely collapse to the ground. He stated:

It does make sense that this episode with Terra would refocus attention on stablecoins generally. And, by the way, failure should be an option. It’ll probably take some failures in this space in order for the market to figure out what works.

As the LUNA ship sinks, it would appear no one wants to have any links to the project.

Recently, a rumor sprung up that suggested big pocketed VCs were behind the LUNA price dip. It was speculated that BlackRock and Citadel had borrowed 100,000 BTC from Gemini and swapped some of it for UST before dumping both. Even Charles Hoskinson, the Cardano founder had jumped onboard and was among those who spread the rumor on Twitter, but he has since then deleted the tweet.

Gemini denied the rumors in a tweet and dismissed any links to BlackRock and Citadel.

 

About Author

Steve has been a blockchain writer for four years, and a crypto enthusiast for even longer. He is most excited by the application of blockchain to solve the challenges facing developing nations.

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