Topic: UST Stable coin depegs from dollar USD may Crash BTC,cause crypto death spiral (Read 878 times)

I believe that major liquidity provider may not be true for just one person, or maybe it is true, but the 100% guaranteed truth is that we have a ton of people who got together to be a big liquidity provider, when you consider all of us who got out, that becomes a huge one. So just one whale or all of us, the result is that a ton of liquidity left the market recently.

This allowed only the few that got in, to get out and make the market move a lot. This is why I believe that the end result is the same, the fall was caused by lack of liquidity, and the volatility caused by less than normal amount of money sold but not bought by others.

According to news, Pantera Capital cashed out 80% of their investment (in $LUNA) before UST crash

This news matches very well with the analytics above. It's strange since beginning that why many Ventures Capitals kept silent and did not help Terra to rescue UST peg and save LUNA. Now I think they did not have reason to do it because the crash does not affect them so they don't have to protect their own money in Terra.

Similar to what Boafeng speculated on insider trading, which should in reality not be a speculation, this news article shows that there were insiders who might be the first to receive the news on what was happening behind Luna and UST. Joey Krug might be saying that the market has been frothy, however, they might have been one of the first to be informed that Do Kwon was moving bitcoin from Terra's treasury to the exchange to defend the peg.

Also, Pantera's node and other insiders' nodes became offline during the depegging



Pantera Capital, one of the high-profile backers of Terraform Labs, cashed out nearly 80% of its Terra (LUNA) investment well before TerraUSD (UST) collapsed last week.

"The market has been fairly frothy over the last year and thus we'd exited the majority of our position before any of this happened," Joey Krug, co-chief investment officer at Pantera Capital, told The Block. "Roughly 80% over the last year, fairly gradually over time."

Source https://www.theblockcrypto.com/post/147668/terra-pantera-capital-cashed-out-80-investment-before-ust-crash

And it looks like someone is going to have some legal issues very soon:

https://www.theblockcrypto.com/post/147606/south-korea-investigates-financial-crimes-crypto-terra-luna-kwon-crash

Shocking.....wait no it's not. As I said reading it anyone could see it was a scam from the start.
You can't give 20% rates anyone who thinks differently can't do math.

-Dave

I don't think it is correct to call what happened with $LUNA is dumping. That token was crashed to the hell, not only dumping, not normal dumping.

Shitcoins follow Bitcoin but Bitcoin does not follow them. Shitcoins die with time, Bitcoin does not. Coinmarketcap has Historical snapshots.

Most of shitcoins from 2013 now die.

All good things then. Stablecoin questions came for me even in my first year of learning about Bitcoin and crypto. From the days of Spoofy and people getting Bitfinex'd. And even when algorithmic coins came out, they all failed within months.

So... we've been constantly told and warned. But if it took a collapse of Terra's proportions to finally make people sit up and take notice, all the better.

But mark my words, the same guys going in for 20% APY are going to hungrily enter the next big promise. No lessons will be learnt.


To be fair, the governments of various countries have bailed out investors numerous times, or have had other states bail them out. Which is more than you can say for crypto.


Didn't Terra have something like 3 billion dollars in Bitcoin reserves that didn't do shit to the fan-hitting shit?

I hope this has given you (and other newbies like you) some very valuable experience that shitcoins dumping is never going to cause any major changes in bitcoin price since it is now 7 days later and bitcoin price is exactly where it was when the shitcoin called Luna first started dumping hard.
This is not the first time it happens either. There have been other big shitcoins, bigger than Luna, that got dumped hard and people thought bitcoin would follow. Not to mention that bitcoin price is not high because of some shitcoin! It is high because of real adoption, unlike the shitcoins themselves that exist because of bitcoin.

The thing is..... This Stablecoin debacle has started a "trigger" event... because a lot of Stablecoin holders are now questioning the validity that their coins are backed by something... or if it is just backed by "promises"    

The funny thing is... Fiat is backed by government "promises" and that is acceptable by the broader public, but when a Stable coin is backed by "promises" ....people will make a big thing out of it.

The good thing is..... some people behind these coins have BTC reserves to pump the validity of these claims, when the shit hits the fan.  

Late reply but no.  It is not a sign of how out of touch you are.  It is how quickly a coin comes and goes.  Unless you like and follow hype, you will likely miss it completely.  I follow markets on a daily basis and it happens to me every week that I wonder where the heck did a coin come from in the top 100's.

-
Regards,
PrivacyG

If some hero or legendary members are reading that, it would be nice if you could share my post or spread the information by yourself.

Thanks

With just 80 million out of 3,9 billion from the reserve, UST can not be made whole. That is just 2 percent of the reserve for 99 percent of its users.

TFL, LFG and Do Kwon are lieing at every turn. They are scammers.  I highly believe they are still having the majority of the btc reserve or have sold it to themself. Selling 98 percent of the reserve to a handful of whales does not seem to be right/legal.

The best shot is to take legal actions against them to retrieve the bitcoin reserve or other funds they have syphoned over time. With that money the majority of UST holders could made whole.

Then Fatmans proposal on terra money would be the best shot. Basically everyone would get UST maginal tier based back in form of USDC, favoring smaller wallets. Example: The fist 5000 UST would get 90 percent back, the next 15000 UST would get 80 percent back, the next 25000 UST would get 70 back etc.
So some who holds 40000 UST would get back: 5000*0,9 + 15000*0,8*20000*0,7=30500 USDC.
Above is just an example not real numbers.

Exchanges would need to provide relevant data of how many users did hold how many coins at the prepeg date. Then users could exchange their UST to USDC. For users who had panic sold they would need to buy back the UST in order not to gain twice (compensation+selling)

What about luna holders: UST holders would in this proposal priotized, because UST was supposed a stablecoin and not a volatile assets. Luna is also a governance token from the legal perspective. However even UST holders are priotized, LUNA holders should be included and made also somehow partially whole. We should avoid that Do Kwon pits UST and Luna holders against each other. LUNA and UST holders have to unite against LFG, TFL and Do Kwon .


Another smaller shot is the possibility that big players will donate something. Binance CZ, Justin Tron and Vitalik Buterin have already twittered about Fatmans proposal to be the best way. The whole crypto reputation is at stake and if millions affected users are spreading the word, crypto will go down in the longterm, decreasing revenue or wealth for the big players or exchanges. It would be in their interest to help and also avoid lengthy and costly lawsuits.

Some links below:

Fatmans Proposal tier based USDC compensation for UST holders: ([Proposal] Tiered repayment: 1:1 USDC refund to all UST holders up to a certain cap per-wallet using LFG funds, favouring small wallets)
https://agora.terra.money/t/proposal-tiered-repayment-1-1-usdc-refund-to-all-ust-holders-up-to-a-certain-cap-per-wallet-using-lfg-funds-favouring-small-wallets/6471

Binance CEO CZ tweet about Fatmans proposal:
https://twitter.com/cz_binance/status/1526129841376043008

Justin Sun tweet regarding Fatmans proposal:
https://twitter.com/justinsuntron/status/1526149180909289472

Vitalik Buterin tweet regarding Fatmans proposal:
https://twitter.com/VitalikButerin/status/1525561624974700545

Other links:
Discord link to Fatman regading legal actions against LFG, TFL and Do Kwon
https://discord.gg/k3DPgn9ds6

Some legal background information:
https://agora.terra.money/t/next-steps-for-luna-ust-holders-a-detailed-analysis/22084

Fatmans twitter account:
https://twitter.com/FatManTerra

Please be always aware of scammer or impersonators. Fatman or other will never dm you first. All links i provided, you can recheck in the "Fatmans Proposal tier based USDC compensation for UST holders" link

Insider trading in the cryptospace is a certainty because it is easier to do with everything almost unregulated. Coinbase has accumulated and pumped coins with the knowledge that the coins will be listed. Binance and other exchanges are doing this also. This is the power of having your own trading desk without a regulator watching you.

Who said that this would create a death spiral? Do Kwon has dumped most of the bitcoin in Terra's treasury. There might only be 300 coins left in the wallet hehehe.

It just goes to show that even tokens like Tether which claim to be backed by dollar reserves are vulnerable to large shocks and ripple effects throughout the market. Like a row of dominos, it has shown that when one starts to fall they are all likely to fall and the panic affect can be overwhelming. You're much better off sticking with truly decentralized currencies like Bitcoin if you want to be part of this market, it has inherent volatility but is still a lot more stable and not tied together with the banking deposits held under centralized conditions which also rely on a large degree of trust in companies that can be unaudited for long periods of time.

Yes, better for them to get out of this market as they are just deceiving people. I also believe that they were holding BTC just for a show, to gain confidence from their holders. But now, we are seeing their true colors. Do Kwon said that he will rebuild their platform. I don't think they can, their investors already lost their trust to this team. Do you really think they will spend more on their projects? So yes, Luna has nothing to do with BTC market as we move forward. If they don't have BTC anymore, that's great. So they don't need to lure investors by their BTC holdings.

Bitcoin does not rely on Luna. There was completely no connection up until Luna team decided to boost people's confidence by buying BTC. Then they sold that BTC all at once in panic, proving that BTC was not to back the token. It was just there for show, to make people think that there is any backing. That's why there was such a panic among holders of Luna because they thought devs are running an exit scam. Bitcoin was doing great long before Luna was created and it will be doing so long after it's gone. Now that all BTC held by Luna devs was sold there's no possible way for Luna to impact bitcoin.

The good thing about Bitcoin that most Altcoins lack is it's decentralisation, UST is not as decentralised as it looks initially. The crash of Luna and UST will definitely impact negatively how people view Cryptocurrency but it won't crash the price of BTC further.

I don't believe that Do Kwon and his team will put themselves in trouble by doing this. I don't say anything as never can happen but even if Terra leaked it to insiders and if insiders (two crypto ventures you said) did short UST for profit, they are evil funds and should not be trusted. If they did it, they brought suicides to many investors, not only bankruptcy.

I understand regulations must come and will become more strictly even without the UST LUNA catastrophe.

How LUNA can recover from it? Buy back and burn with support from exchanges and ventures? It will takes so much time, months maybe.

^^ Oh, so this means that there is insider trading or this might be the plan of Do-Kwon months ago when he shares that he will start to buy billions worth of BTC and then this crash happens.

But I wouldn't say that it's a death spiral, only those strong altcoins survived the current downtrend. Bitcoin starting all over again and trying to regain back the $30k support levels.

It is speculated that there were insiders and investors of Luna themselves who were the first to know what was happening and withdrew all their UST from the Anchor protocol, dumped their UST for USDT or USDC in Curve and also went to short Luna. There are 2 cryptofunds that also are market makers who have the capability to have done it, 3 Arrows Capital and Alameda Research. They might have collected billions of dollars from this catastrophe.

Regulations on stablecoins might come much quicker than expected. Circle and USDC might be given the most benefit because of this and steal Tether and USDT's lead in the stablecoin market.



A top official at the U.S. Securities and Exchange Commission (SEC) signalled on Thursday that stricter rules around crypto stablecoins could be drawing closer.

Cryptocurrency markets have an overall value of about $1 trillion this week amid the collapse of the stablecoin TerraUSD and a destabilising plunge in Tether, currently the world's largest stablecoin by market cap.

Source https://www.reuters.com/business/finance/secs-hester-sees-movement-us-stablecoin-regulations-2022-05-12/



Also that arm with the tattoo is Mike Novogratz of Galaxy Digital hehehe.

I know how crypto market is with fud and everything will return to normal. However with this case, it is an attack and seriously it goes beyond anything we can imagine of. Unfortunately, in calculation it is impossible for LUNA to come back to even jusf $1. Anyway, I smell many things fishy in this case. Many ventures stay outside even they have serious huge capital there. Did they short it too? When short is done, will they suddenky appear to give financial support for Terra?

Nice tattooo!

It is another thing. If the incident is a huge combined attack not only on Terra but also aim at crypto market in general, months ahead will be bad.

I don’t see much point at all in creating a stablecoin that will be backed by a decentralized cryptocurrency and, like all cryptocurrencies, has a high degree of volatility. This undermines the credibility of other fiat-backed stablecoins and also poses an existential threat to other fiat-backed stablecoins.
If this continues, governments could ban the use of any stablecoins that use their fiat altogether. Moreover, their CBDCs will soon begin to appear en masse, which will compete to a certain extent with the current private and commercial stablecoins.
But the situation with UST and LUNA cannot seriously affect bitcoin, ethereum and other cryptocurrencies.

It might not only be that. Before we were very worried about USDT's peg if it can keep it versus USD then now we are presently looking at UST if it can recover and repeg to USDT which also is trying to keep its peg with USD hehehe. This is a comedy show being written in crypto history with algorithmic stablecoins pegging with fractionalized stablecoins that are pegged with a fractionalized fiat currency. The Big Short 2.0 in the making.

Also, it is speculated that a major liquidity provider in the cryptospace has lost much of its equity in UST and Luna. This might cause the whole market to dump lower. Follow the Luna wolf tattoo hehehee.


Galaxy

Unknown with that question. No one has the answer and it's 99% down or let's say that it's already 100% since it's too far from the normal price and ATH that it has met before.
Well, it's probably safe to assume that everybody has to stay away from them if it's making you think that you should put your money on them. Like they say, it's totally devastated and their economy crumpled.

Their products have some death points which they should realize at begining when they build it. What Terra did with UST and LUNA is partially similar to margin trading and liquidation on the market. Traders are not safe if the collateral asset is Bitcoin, altcoins because when price of collateral asset is down deeply, their position will be liquidated.

Now you can add stablecoin into bad asset list for collateral. I don't understand why Terra comes up with the idea, totally algorithm, smart contract based stable coin which is backed by other coins even they are Bitcoin or Ethereum

And yet a whole bunch of the people who got burned with this will just pour their remaining funds into some other so-called-stablecoin (shitcoin).  And then they'll act surprised when that one fails too.  Greed makes people dumb, I guess.  Too busy buying the hype to notice the con.

As I said above a lot of people are or were operating under the assumption that this was a legit project.
I am still not sure if it was or not of if it was a long con, never looked into it so I can't comment, but remember people will fall for a lot of things.
In the end it probably bumped the price down a little but with all the other downward pressure at the moment, not that big a deal IMO.
People believe what they want to believe, not crypto related but: https://twitter.com/GeorgeTakei/status/1524836871460769801

-Dave

Yeah you are right now that I think about it haha. Update: Its now worth $0.0128USD. That is absolutely fcked. There is no way they are coming out of this. I don't even think they will 'rebound' even a little.

You know the funny thing that I realised is that Luna claimed to be better than Bitcoin as a more usable 'currency'. The hilarious thing is their network was backed by Bitcoin. So if anything went wrong with their system they were going to sell the Bitcoin in their Luna Foundation Guard and try fix it. Jeez what a fcking scam. I feel sorry for those who had a lot of money in Luna. Because at the moment, it is worth just a few cents. Hopefully they learn from their mistakes that only Bitcoin is worth anything.

Their entire ecosystem collapsed so fast so it's hard to see them coming back  unless someone with a huge bankroll comes to revive it. Some speculators will try to play and may cause a little bounce but will also leave as soon as they have taken a little profit.

Okay so I checked to price and it's now down by over 99% from ATH hehe. It's already a ghost.

It already happening looking at the time when I publish this post and the price of Bitcoin as at that time was trading around $30k-$32k per Bitcoin.
We could still get another dump because of the mass panic and have more people sell , for instance some legendary investors and long term BTC holders would sell to meet margin call regarding this very event because most investors would sell to protect their funds from further crashing lower than the price they bought and likely get back when the Storm is over, I do believe that Luna foundation guard LFG might have sold all the Bitcoin in their reserve.

seemed a pretty overly complicated way to make something "stable"


errr now that you mention it..

You are absolutely right about this, basically, what LUNA used to stabilize the Peg of USD=1$ was they used to create more of LUNA in order to increase the total value of their USD peg available, similarly they burn LUNA in the other case, now the price has fallen so much that they will have to create a huge amount of LUNA in order to peg that value back to $1, when they go ahead to that LUNA which is already falling in price falls even further, when it falls even further, the foundation has to buy even more LUNA in order to peg the dollar value this is creating a cascading effect therefore making it impossible to protect the peg created ultimately subsiding the ecosystem, only way to protect UST is if someone buys out the whole system and backs every UST with USD. Other than that we don't have any way out.

Death spiral? Lol. Silly FUD as usual. BTC will recover from this just like it has on many occasions in the past(Some far worse than the current bear market). However, many altcoins will disappear into oblivion for sure.

Stablecoins aren't exactly stable all the time and UST has proven that in a big way. Sad to see LUNA investors completely losing it after it pretty much died just like that.

No. It may bounce around and give people opportunity for profit, but I don’t see it actually growing organically. It was basically proven to be a Ponzi-like instrument to make people rich and then catastrophically fail. Many predicted it. I didn’t even know or care what Luna or UST was until Do Kwon started pumping the market. It was clear he was paying too much and being taken advantage of by the market. If Luma does rise again, it will be similar to the wool on a sheep growing longer. At some point they’re going to be sheered and end up naked again. Don’t be a naked sheep. Invest in real assets or if you’re going to go digital, stick to the “safer” investments, like BTC or ETH. They may fall 80% in a year or two, but at least they won’t fall 95% in 3 days…

I do agree that this is a "test" for crypto for sure. I am not saying that it means anything substantial but it is a test. Because, there is one project that has so much money from everyone and they are claiming that they were pegged to 1 dollar, now we are seeing it not so much.

This means that if you end up trusting so much money on some projects, even if they claim they are stable, maybe they are not as stable as you think they are. This could cause people to lose a lot of money if it spreads to other projects, like if USDT suddenly starts to go down and BUSD does as well then it is not going to be that easy to recover as whole of crypto. This should pass too, and we will be fine, but it will take a good chunk with it.

I'm just looking in to Luna now, since I never waste my time on shitcoins, but the whole set up is hilarious. Does literally nobody look in to things before throwing their money away at them?

UST is pegged to a dollar because you can sell it for a dollar worth of Luna. But Luna isn't back up by anything at all, and gets created out of thin air when you convert UST for Luna. So there is an infinite sell pressure on Luna, which will drive the price to zero. Go and look at the supply, and laugh: https://fcd.terra.dev/v1/circulatingsupply/luna. It's jumping up by tens of millions every few minutes.

Who in their right mind threw money at this shit? And even now, when the supply has jumped from 300 million to 4.5 billion in 24 hours, people are still thinking about buying this and hoping for a rebound? Are you literally stupid? The next time someone calls me a "toxic bitcoin maximalist" or some other such nonsense, I'm just going to point them to this. Altcoins are 99% scams.

This is the exact opposite message you should be taking away from this. When bitcoin goes up, everything goes up. When bitcoin goes down, everything else goes down more. Go and look here: https://www.coingecko.com/en/global_charts. Altcoins losing 2x or more the value than bitcoin is. Bitcoin dominance increasing. Portfolio diversification means buying different assets which are not intrinsically linked - it doesn't mean dumping a bunch of your money in altcoin scams which are just going dump harder than bitcoin.

Yeah you are right, I just can't get my head around it though, because you know it was one of the top 10 crypto coins and it was basically a ponzi. It has to be a ponzi because in my head, there is just no way a top 10 coin can drop 99% of its value in 24 hrs because of 'market volatility'. I never understood what the point of portfolio diversification was till now; because the way I saw it, if Bitcoin goes up everything goes up. If it goes down, everything goes down. But I've understood the hard way why you must diversify your portfolio especially in the crypto space.

I don't think it can, It's a super ponzi and Do Kwon stepped on foots claiming he has best stable coin. The supply is now x3 of its initial supply. Luna is being used right now as collateral for their stable coin, that's why the token supply has tripled in the past 24hours cos they need to mint more tokens to cover the UST... If you buy luna, you're just providing exit liquidity for UST holders

No, I don't think so. It looks like yet another cryptocurrency that is going to disappear. To get the price back up to where it was, it is going to take huge amounts of money and I don't think any serious investor is going to consider it, as although there might be a small spike, it would be like trying to catch a falling knife:

'A falling knife is generally used as a caution not to jump into a stock or other asset during a drop. Traders will trade on a sharp drop, but they generally want to be in a short position and will use technical indicators to time their trades.'

https://www.investopedia.com/terms/f/fallingknife.asp

Yes it was. They were openly slowly but surely converting the UST for USDC through high-liquidity stablecoin DEXs like Curve.

Terra/Luna/UST is a big enough project that it's been getting headlines on traditional news sites. I wouldn't be surprised if this fiasco would be used by the authorities to create laws against bitcoin/crypto.

I do not know how fckn stupid people can be..... they selling their bitcoins to secure their Stablecoin and to try and fool more people that it is backed by something, after it was backed by nothing. (shitcoin) 

Do they really think people are going to trust them now? When people get burnt, they panic sell and they run for the hills.... so we are just going to see more UST being dumped.

We will also see more Stablecoins being dumped, because UST has now cast a dark shadow over other Stablecoins. Let's hope that capital ends up back in Bitcoin to spark a recovery. 

The market sooner or later gets rid of all the sketchy "too good to be true" projects/companies.Terra is just one of the big ones.Maybe Tether will follow.
I'm sure that there will be panic selling and a bloodbath on the crypto markets,but calling this a "death spiral" seems like exaggeration and spreading FUD to me.Bitcoin Core isn't going to be destroyed,just because some sketchy stablecoin project exploded and a the risk seeking investors lost some money.The Bitcoin Core blockchain is alright,the BTC price will be low for a while(probably one year or more),but this is fine,because:
1.Cheap Bitcoins for us to buy and wait for another bull run.
2.BTC getting cheaper would actually make the FUDsters leave the BTC market for a while.
If the BTC price was 60K right now,the FUD drama  would have been crazy.

Do you guys think Luna could come out of this?

At the moment, it is priced at $0.3045USD on CoinMarketCap. Thats a 97% drop in the last 24hrs.

If someone sells, it does not put the whole crypto economy into a death spiral rather it would create instability for a while considering the situation but we can also buy more, hold. The reason they might be doing could be tbe new rates of FED  interest but at the end there are many others who might try and get into the market, besides Luna went 35% down which is shocking while BTC is still holding on and we are not seeing extreme drastic changes. It's always a balance and I do believe all we need at the moment is 'patience' and if you sell your coins in a hurry you might miss a lot.

one thing that is common with most of the altcoins is that their volatility is very high in terms of rising and falling, they are unpredictable when it comes to the price moving upwards, they can be very fast to appreciate and as well within the shortest time dropped and loose value, in the case of Luna here, it has the worst record of loses as it's ranked the highest  and top loosing coin (highest looser) while bitcoin only maintain a drop in price in a steady and gradual process unlike the massive fall of the altcoins.


Bitcoin is exceptional in this regards, why the panic on bitcoin since it's the major determinant of other cryptocurrencies moves and fate, despite the fall in the crypto market, bitcoin remain the most valuable coin and can not fall the rate others are, and for the investor on bitcoin, i think this is the best time for them to hold while the intending investors should take this opportunity to invest in bitcoin as this time is the opening for a launch on bitcoin investment and not shitcoins.

What happened to $ust and $LUNA shows that no matter the level of trust we have in any coin we should not go all in and always learn to take profit, the Fud and dumping really affected the whole crypto market entirely. Currently $ust is now at$0.63 from $0.21 I believe that ust will be back to it previous position, but luna going back to all time high will be a long journey awaiting to occur

Or, if we go full tinfoil hat..
Were those coins actually bought by them with real money and they were owned by them in the first place?
Or were those coins borrowed for this purpose alone, that would have been paid with money from future sales?

The other interesting part is, will there be any consequences for all the money lost, any investigations, or, the whole crypto world is just an add-on of the old system where you can run banks and companies into the ground, lose billions of people's money and not face any consequences? Cause for me it's starting to overlap dangerously close.


You can't protect anything and there is no way to protect something like this.

Some don't understand the fact that all those money that was used to buy Luna or Terra or whatever the shitcoin was called it's not invested there, it's in the pockets of the ones who sold it, so in order to recoup losses, you will need more money for some new investors.

Imagine you buy a house and the market crashes, the house is still there, you have paid 100k for it but now nobody is willing to give you're than 50k. The 100k you have paid has been already spent by the previous owner on hookers and drugs in the Bahamas so you will need a fairy to give you 100k, otherwise, it's 50k. Same for Luna, they need now somebody to pay 60 or 100$ per coin, fresh money from outside to recoup it, where is this money going to come from and why would anyone do it?



 

That's certainly one of the possibilities, that Do Kwon played the long con and that this is nothing but a rug pull disguised as an attack. It certainly wouldn't be the first time we see something like that. Speaking of Do Kwon, just saw an interesting article about his (alleged) previous involvement in another failed algorithmic stablecoin, Basis Cash.

Or, it was all just a scam from the start and in the end it really was nothing but another scamcoin P&D just executed with a bit more finesse.
We only know what we can see, we don't know what we don't know. So this could have easily all been a setup from the early days just waiting for everything to fall into place.

-Dave

Saw that speculation as well, not sure what to think of it while the most plausible one I found so far is this one. Either way, it was definitely a market manipulation and someone made a lot of money off it.


Its a pure gamble right now and I personally don't wanna touch that shitcoin at all, even though chances are decent that it will eventually make some pullback or at least dead cat bounce before it goes below $1 once again. Terra priority right now is their stablecoin and to do that they have to screw LUNA.

I'm not sure if the rumors are true but I saw a thread about this which they are saying this as pure market manipulation.
The link is from I'm going to quote it because reading the text from there is very much hard, it will be easier if I separate the paragraphs.


Anyway, do you think its a good buy for Luna as it now dips below $3? Unbelievable dip really so I'm doubtful whether they could recover.

I am also curious if they didn't buy any BTC this will happen.
But it seems like other people already noticed that there is a hole in this algorithmic-based Stablecoins Terra USD. And I also saw that some people telling it was first started at WAVES and then they did it next to UST stable coin.
But it seems even UST didn't suffer, the recent dump is still expected, it just happened.

I'm not sure if you just woke up but it's already been says since UST lost the peg, and I totally understand that it's a huge problem Luna since it's probably gonna die, but dragging down BTC, that's a totally different story. BTC is not gonna die because of UST/Luna.

We know stable coins can be minted from thin air. Even USDT, we don't know how they actually back all their USDT with USD and other assets. In the past, there was drama about USDT too. You can verify it on the USDT price chart. There were times that stable coin has its value down to around $0.9.

UST probably used wrong algorithm and they are centralized pegged with LUNA. Bitcoin and Ethereum can not save them. I hope LUNA and UST will recover but who knows.

PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets

@mk4 yeah I spent now about 10 minutes trying to understand Terra -- so it's actually a shitcoin and a stableshitcoin backed not even by shit. And this is just Bitcoin losing <30%. Imagine if it's broken and chased sub 30s. Fantastic how people can't see this coming.


Yeah, all them people trying to convince me to look at some marvellous algorithmic coin gone quiet, making me feel better and better about my failure to capitalise on them shitcoins a year ago. 22 cents now I'm seeing on Twitter for their "stablecoin" oo-ee.

I don't see what happened except that it is price manipulation, TERRA tried to make a quick profit by creating a stable currency, buying several thousand bitcoins and thinking that things will go well, there will be enough liquidity and then they will not need to be tied at a 1:1 ratio to keep the currency growing (exactly As happened with USDT), but things did not go well.

With the days, more details will become clear whether this is as manipulation or a breakdown in their stability algorithm.

Overall, I chose to take the risk and bought 250 UST for $100 .

What is happening with LUNA is a big check of reality for the whole cryptocurrency industry. One thing for sure is that when a stablecoin turns out to be otherwise then it would be good to fully scrutinize the things backing the stablecoin, in the first place. This shows that a stablecoin pegged on top fiat money can be the way to go for the time being. Sadly, this development is affecting Bitcoin and is the major reason for its price spiral...all because BTC is utilized as a back-up value for UST.

Another day, another shitcoin collapses. Just happens to be a more popular one this time. Isn't the first and definitely won't be the last.

Bitcoin doesn't care. Yeah, there will be some short term implications on the price, but another shitcoin collapsing makes absolutely no difference whatsoever to how bitcoin continues to run, continues to have 100% uptime, continues to be decentralized, continues to be developed, and continues to grow. It obviously isn't going to cause a "death spiral", and in fact the more shitcoins which collapse then the better long-term for both bitcoin and the crypto space as a whole.

No. It is a sign that you are not a moron chasing impossible promises with worthless shitcoins.

Nada. LUNA holders took a risk on a project that's highly highly likely to implode (it just did), and now they face the consequences. TerraForm Labs would have to raise a HUGE amount of money to be able to bring back the peg, and I don't think VCs would risk their capital on a project that's highly likely to be dead.


If you want to know what happened:

Is it a sign of just how completely out of touch I am in this field that I never once heard about Terra, or UST, or any of the supposed implications on Bitcoin until yesterday? And that's only because of work -- someone sent me something to look at about Terra, and I had to look it up.

I've seen a lot in my time but 20% APY? That should have raised a lot of red flags. But well, this is crypto, isn't it?

This is very important question to ask and something we should know at the moment on what the Luna foundation guard (LFG) is actually doing at the moment with there Bitcoin reserves. Because most investors with bags of Luna are currently stucked with confusion at what alternative option or steps to take in order to protect their Funds at this very critical point in time.

You're pretty late as the selloff of LFG's bitcoin holdings has started since yesterday; their public BTC address is already out of BTC (moved to exchanges already). The question is just that have they already sold every single BTC holdings or not.

We had news this weekend , Monday and Tuesday that the stable coins UST depegs from  dollar USD and  has collapsed and continue to plunge in price even Luna price is currently trading around ($9 - $11)  this morning as at the time of writing.
The UST stable coin is not really back by anything, so people do need to get out right away.

                     HOW MUCH WOULD THESE NEGATIVELY AFFECT BTC AND THE ENTIRE CRYPTO ?.

IN MY VIEW
Doing this may cause the crypto death spiral and it means that there will be a panic selling and could just collapse Bitcoin ,Ethereum, and the entire Crypto market and trillions of dollars life savings could be wiped out just in a moment and currently people are loosing money on crypto Twitter right now, companies have started selling millions of dollars of UST existing , exchanging their UST back into other pegged dollar USD coin and have lost thousands of dollars just in a single transaction conversation process and the spread wasn't just very good looking at exchange rate between UST to Dollar, they just exited that position for the fear of UST finally collapsing or having a free fall , So in a worst case scenario these companies  
like.
Jump capital, Luna foundation guard (LFG),
 Do kwon the founder of Terraform labs and others are going to be selling hundreds of millions of dollars worth of Ethereum to try to prop up this struggling Terra ecosystem and then they may also go into their Bitcoin reserves which some of have started doing already and may also be sold to prop up Terra.

Summary....
Therefore going further, If the UST peg cannot hold, then I think LFG will have to dump its bag of Bitcoin it loaded and this will cause more panic selling and cause Bitcoin to spiral down and further crashing down the price of Bitcoin and the entire cryptocurrency as well.

Please throw your own opinion on this as we have great panic right now.

Link for more details
https://www.coindesk.com/business/2022/05/09/ust-stablecoin-falls-below-dollar-peg-for-second-time-in-48-hours/

https://twitter.com/crypto/status/1524268467448389634?s=19