Why did the LUNA token fall by 99.99%?
Experts recognized the Terra USD project as reliable and promising; nothing foreshadowed the fall of the LUNA cryptocurrency. This happened on March 30, 2022, when the entire cryptocurrency market was already experiencing a strong decline. By chance, on May 8, the algorithms for pegging to the dollar stopped working. As a result, the on-network token LUNA lost 96% in price that day, and then
99.9%. In April, the altcoin was trading at $119, and now it is worth $0.0000768.
The exact reason for the fall of the Luna cryptocurrency has not been established, but many experts associate it with the sale of a large amount of UST by one of the investors. On May 8, Keith sold tokens worth $300 million.
Such actions can cause sharp fluctuations in exchange rates, as they upset the balance of supply and demand. Some analysts believe that
This manipulation was a deliberate game of large whales - investors.
Financial tycoons could also use the knowledge that Terra's reserves are managed manually, not by algorithms. As a result, they used
the information received to “pushe” the price and make huge profits from arbitrage.
But that was then, what news does Terra Luna have today? At the moment, the Terra 1.0 project is completely abandoned, and Do Kwon himself (the creator of LUNA and UST) decided to “start history anew” and restarted the project, returning it to its original form. And he gave it the name Terra 2.0, it takes into account the mistakes of the past, and also lacks UST.
