TerraUSD

𝗞𝗿𝘆𝗽𝘁𝗼𝗺𝗮𝗿𝗸𝘁 𝗴𝗲𝗿𝗮𝗱𝗲 𝘃𝗼𝗹𝗮𝘁𝗶𝗹

This week was a particularly turbulent one in the crypto markets. The total market capitalization of cryptocurrencies started at $1.58 trillion and hit a low of $1.13 trillion on Thursday, down 27%, but that doesn't give a full picture of what happened.

𝘞𝘢𝘴 𝘪𝘴𝘵 𝘱𝘢𝘴𝘴𝘪𝘦𝘳𝘵?

Since the beginning of May, many cryptocurrencies have lost significant value and continue to lose value every day. For example, Bitcoin is $BTC (+1,24%) Worth 32% less than it was a week ago. Ethereum, the second largest cryptocurrency, is down 36%, while other major coins such as Binance Coin $BNB (+0,59%) (-41%) and $XRP (+20,47%) XRP (-47%) have fallen even more.

𝘞𝘰𝘳𝘢𝘯 𝘭𝘪𝘦𝘨𝘵 𝘥𝘢𝘴?

The culprit may be. $LUNA (+6,65%) Luna, a cryptocurrency that had a market cap of around 27 billion a week ago. Now $LUNA (+6,65%) but is almost worthless. Investors are dumping many other digital currencies, which has undermined confidence in crypto markets.

𝘞𝘢𝘳𝘶𝘮 𝘪𝘴𝘵 𝘓𝘶𝘯𝘢 𝘧𝘢𝘴𝘵 𝘸𝘦𝘳𝘵𝘭𝘰𝘴?

Luna is a cryptocurrency that is related to the currency TerraUSD $UST (-0,2%) related. Both were issued by Do Kwon and his company Terraform Labs in the United States. TerraUSD is a so-called stablecoin whose value is supposed to be stable. Kwon's promise: At any point in time, one TerraUSD unit can be exchanged for one dollar worth of Luna coins. TerraUSD, on the other hand, lost its price stability in early May for unknown reasons. The value of Luna declined as a result. At the same time, the case undermines public trust in stablecoins.

𝘈𝘶𝘴𝘸𝘪𝘳𝘬𝘶𝘯𝘨 𝘢𝘶𝘧 𝘜𝘯𝘵𝘦𝘳𝘯𝘦𝘩𝘮𝘦𝘯/𝘎𝘳𝘰ß𝘢𝘯𝘭𝘦𝘨𝘦𝘳

Major investors such as Elon Musk, the CEO of Tesla ( $TSLA (+4,3%) ), Brian Armstrong, the CEO of Coinbase ($COIN (+4,1%) ), MicroStrategy chief executive Michael Saylor, and twins Tyler and Cameron Winklevoss are the "Horsemen of Cryptocurrencies" or the "Crypto Bros," whose cumulative crypto assets dropped by $20 billion during the crash.

The $1.5 billion investment of $TSLA (+4,3%) with Bitcoin has failed; Saylor's assets have fallen from $8.5 billion six months ago to possibly less than a billion dollars and $COIN (+4,1%) was trading 84% lower than when it went public.

𝘊𝘰𝘪𝘯𝘣𝘢𝘴𝘦

This week, Coinbase $COIN (+0%) , one of the largest cryptocurrency exchanges in the world, released its quarterly results, and they did not meet analysts' expectations.

🟥 EPS: -$1.26 vs. $0.91 expected (-238.20%)

🟥 Revenue: $1.17 billion vs. $1.48 billion expected (-20.98%)

The number of monthly users dropped by 19%. What worries investors and users even more is the update about the platform's risk. They warn that in case of bankruptcy, users could lose all cryptocurrencies in their accounts.

The crypto platform Binance has banned the trading of UST and LUNA. What do you guys think about the ban?

🟥 $UST (-0,2%) TerraUSD, 0.1705 (🔽-82.94%)*

🟥 $LUNA (+6,65%)Terra, 0.0000516 (🔽-99.99%)*

Sources:

https://bit.ly/3L4wi7y

https://bit.ly/3w9yVkl

https://bit.ly/3FKFkFW

*Values: https://coinmarketcap.com/ at 10:00 CEST 13.05.2022 7-day.

$USDT (+0,62%) loses the dollar peg

⚠️ Update: after plunging as low as $0.95, things seem to be returning to some normalcy. Or just the calm before the storm?

After the crypto faction has certainly witnessed the drama around $UST (-0,2%) in the last few days, Tether has now been trading below a dollar for a few hours. The dimensions are by far not as huge as with UST, but it started similarly with UST - and currently you can watch the gap grow.

Unlike UST, USDT is not algorithmic. For every USDT there is a real dollar deposited. The only stupid thing is that exactly this is doubted again and again. At the same time, USDT is the most important stablecoin in the crypto environment. If USDT continues to crash, what we have seen in the crypto environment in recent days was just a small dent.

I for one have swapped all stablecoins into euros and only keep UST for gambling. And don't forget, with the Donkey you heard it first 🥕

$LUNA (+6,65%)
$UST (-0,2%)

𝗪𝗲𝗻𝗻 𝗲𝘀 𝘇𝘂 𝗴𝘂𝘁 𝗸𝗹𝗶𝗻𝗴𝘁, 𝘂𝗺 𝘄𝗮𝗵𝗿 𝘇𝘂 𝘀𝗲𝗶𝗻, 𝗱𝗮𝗻𝗻 𝗶𝘀𝘁 𝗲𝘀 𝗺𝗲𝗶𝘀𝘁 𝗮𝘂𝗰𝗵 𝗻𝗶𝗰𝗵𝘁.

A few weeks ago someone made a poll about doing a post on stablecoins. Unfortunately, UST won at the time. This is a small update post because of the current situation.

𝗞𝘂𝗿𝘇𝗲 𝗜𝗻𝗳𝗼 𝘄𝗶𝗲 𝗟𝗨𝗡𝗔/𝗨𝗦𝗧 𝗣𝗮𝗮𝗿 𝗳𝘂𝗻𝗸𝘁𝗶𝗼𝗻𝗶𝗲𝗿𝘁:

You can always trade LUNA/UST as if 1 UST = 1$. If 1 LUNA is worth 100$, you get 100 UST for it and vice versa for 100 UST you get 1 LUNA.

This is true even if 1 UST is worth less or more than 1$.

This is the system behind maintaining the UST/USD peg. Arbitrage traders can swap LUNA/UST back and forth depending on how much UST is worth.

The more UST in circulation, the less LUNA there is, as they are burned to mine UST. LUNA rises thereby in the price. But how do you get people to swap LUNA for UST or buy UST?

𝟮𝟬% 𝗔𝗣𝗬 𝗕𝗔𝗕𝗬!!!!

𝗨𝗻𝗱 𝘄𝗮𝘀 𝗶𝘀𝘁 𝗵𝗲𝘂𝘁𝗲 𝗻𝘂𝗻 𝗽𝗮𝘀𝘀𝗶𝗲𝗿𝘁?

One or more UST whales have started selling massive amounts of UST. Their exit strategy is simple, just trade UST for other coins all at once.

Whether it was a deliberate attack against the Terra Network is still a matter of debate.

𝗪𝗶𝗲? 𝗘𝘀 𝘀𝗶𝗻𝗱 𝟭𝟴 𝗠𝗶𝗹𝗹𝗶𝗮𝗿𝗱𝗲𝗻 𝗨𝗦𝗧 𝗶𝗺 𝗨𝗺𝗹𝗮𝘂𝗳, 𝗮𝗯𝗲𝗿 𝗻𝗶𝗰𝗵𝘁 𝗺𝗮𝗹 𝟯𝟬𝟬 𝗠𝗶𝗹𝗹𝗶𝗼𝗻𝗲𝗻 𝗶𝗺 𝗹𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆 𝗽𝗼𝗼𝗹?

Okay, if that gets used up, the Bitcoin reserves will have to take a hit.

𝗗𝗮𝘀 𝗿𝗲𝗶𝗰𝗵𝘁 𝗮𝘂𝗰𝗵 𝗻𝗶𝗰𝗵𝘁?

Then we'll just sell UST at a loss.

𝗘𝗿𝗴𝗲𝗯𝗻𝗶𝘀:

Selling pressure for investors increase massively. LUNA is tanking, UST is tanking, even BTC is tanking because tens of thousands of Bitcoins need to be sold to create liquidity. Everyone wants out of UST and LUNA. 𝗘𝗶𝗻 𝗧𝗲𝘂𝗳𝗲𝗹𝘀𝗸𝗿𝗲𝗶𝘀.

𝗪𝗶𝗲 𝘀𝘁𝗼𝗽𝗽𝘁 𝗺𝗮𝗻 𝗲𝘀?

Just suspend trading, disable LUNA/UST swaps :D

Good luck to the people who are invested in it, I hope you get out of it in one piece. Best case scenario of course would be that UST manages to get back to peg. Wish you all the best.

TerraUSD is a stablecoin that can theoretically always be exchanged for a USD without USD reserves and until recently had a market cap of about 18 billion. As has been posted on GQ a couple of times today, this promise has vanished into thin air in the last 24h, when TerraUSD first traded for a good 90 cents only and went down to 60 cents overnight in some cases. In the meantime, the price is back at about 90 cents, higher than this morning, but still far below the target value of one USD. To reach the 90 cents again, among other things, all Bitcoin stocks were sold to hedge the coin: https://datastudio.google.com/reporting/b31cc9e5-c54c-4418-a6ce-b332c57e82e9/page/4YBqC?s=or-T7NeGLew (Thanks goes out to Stramme Maximiliane, who lied to me in another amount).

The cause could not be the bear market, but a targeted attack against TerraUSD, as discussed among others on Twitter

https://twitter.com/4484/status/1524006086147252227?t=LphUkl3FXzHJKHR9if63Xw&s=19

@stonksonlygodown Attack or bear market?

Interest via Anchor Protocol since 26.12.2021