Cryptocurrency price

Terra Luna Crypto Crash Today Why is LUNA Cryptocurrency Price Falling Ust Terrausd Depegging Reason Value

New Delhi: The cryptocurrency market is facing an unprecedented crash this week. At the time of writing, the price of Bitcoin (BTC) stood at $28,031.48, considerably below the benchmark of $30,000. On Indian exchanges, the price of Bitcoin stood at Rs 23.8 lakh. Even Ethereum (ETH) is facing a tough week, currently priced at $1,937.85 on global exchanges and Rs 1.65 lakh on Indian platforms. The biggest loser among all cryptos appears to be Terra Luna (LUNA), which crashed over 85% on May 11, according to data from CoinMarketCap. And the reason behind this is the “unpecking” of the TerraUSD (UST) stablecoin.

LUNA Crash: How much did the price of Terra Luna drop?

According to CoinDesk, the LUNA price stood at $0.37, or Rs 32.34 according to Indian exchanges. The cryptocurrency saw a drop of 55% on May 10 and another 85% on Wednesday. Over the past two days, LUNA investors have been wiped out 95% of their wealth.

LUNA’s price is now around 97% below its all-time high of $118, as seen in April.

LUNA crash: why is Terra Luna crashing?

The Terra ecosystem adopted UST as a stable currency, which led to the interconnection of LUNA and UST. A stablecoin is linked to an underlying asset, such as a precious metal like gold, or the US dollar.

The UST has recently “un-pegged” to $0.45 from its value of $1. This marked a decline of about 55 percent. Since UST and LUNA are interlinked, the massive drop in UST value caused the overall drop in LUNA.

According to CoinDesk, Terra’s market cap is now below $1 billion ($994.17 million at the time of writing). This stands in stark contrast to its record market capitalization of around $25 billion.

For now, investors can only wait for the market to gradually stabilize to help recover from the losses.