Terra and Luna Cryptocurrencies Collapse: What Happened?

Terra and Luna Cryptocurrencies Collapse: What Happened?

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Disaster in the world of cryptocurrencies : the Terra project is in free fall, with a loss of 99.96% of the value of its two main tokens in less than 24 hours. The network has been suspended and no transactions are currently possible.
How could a token that was worth almost $80 less than a month ago collapse like this? Today, Luna is worth only $0.000033 (value at 2:52 p.m.). For its part, the stablecoin TerraUSD also fell, with a devaluation of 79%.
A historic crash
Nearly 40 billion in capitalization evaporated in a few hours. An incident that will undoubtedly mark the history of cryptocurrency, and a record from which the Terra blockchain would have gone well. For some analysts, the event could even sign its death warrant.
On Wednesday May 11, a rebound of more than 400% had given investors hope, but the joy was short-lived. The tumble is all the more striking as Luna was one of the “little favourites” of the moment for investors, who saw a bright future for her. They took it badly, since in a few hours she left the world top 10 to settle in 222and position.
After putting a sudden halt to the blockchain as a result of these events, the teams behind the Terra project announced that they had relaunched (taking care to deactivate some features) the machine.
How to explain such a fall?
Charles Hoskinson, the founder of the blockchain platform Cardano, advanced on Twitter the thesis of an attack. According to him, the Terra project was the victim of manipulation by an institution. This organization would have managed, by a Ponzi Pyramid type system, to cause a panic sale of buyers, which would explain the sudden collapse of Luna. For now, it is still difficult to say with certainty the origin of this cataclysm. Nevertheless, the coming days should bring more clarifications.
This event comes at a time of tension and high volatility for the entire crypto ecosystem. After a fall of more than 20%, Bitcoin fell below the $30,000 mark this week, before rising again this Friday, May 13. Ethereum had also unscrewed at the beginning of the week by more than 20%, but also seems to be recovering.
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Source :euro news

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