LUNA 2.0, the reincarnation of the collapsed crypto Luna, has had a rocky start since its May 28 release.
After enjoying strong gains in 2021, the crypto Luna plunged below $1 in early May, spelling its demise and the downfall of a linked crypto.
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From the ashes of Luna, also known as Terra, and another coin called UST emerged Luna 2.0, which opened for trading for $18.98 on May 28.
Luna 2.0 has been volatile, peaking at $19.54 but plummeting as low as $3.63 on its launch day.
As of May 31, one Luna coin is worth $9.13, according to CoinMarketCap.
The original coin, now called Luna Classic, saw its first major spike last summer and climbed through the fall and winter.
The coin’s price peaked at $116 in early April, but it’s sitting at $0.000113, according to CoinMarketCap.
Any cryptocurrency investor must be aware that it’s not a guaranteed way to make money.
Their values are highly volatile and can make large swings with no notice, meaning you may lose all the cash you put in.
That’s why it’s important to not invest more than you can afford or into anything you don’t understand.
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There’s also scant regulation for cryptocurrency firms, meaning you’re without protection if and when things go wrong.
What is Luna?
Luna, also known as Terra, is one of two major coins created by Terra Labs, a South Korean company.
The Luna Foundation Guard, the organization that supports Luna’s price, has nearly 30,000 bitcoins in reserve to back the stablecoin, according to Bitcoinist.
The other coin from Terra Labs, TerraUSD or UST, was linked to Luna.
According to Coindesk, the price of UST is “algorithmically stabilized” through smart contracts involving its sister coin.
UST was pegged at $1 through a process of destroying Luna coins and minting UST.
Theoretically, this process was supposed to make Luna more valuable as it becomes more scarce, and keep the price of UST from moving above its $1 benchmark.
A drop in UST price created an unstable market for the stablecoin, however.
“The slump in the Luna is tied to the selloff that ensued after millions of tokens were issued to restore UST’s 1:1 peg,” Finder.com markets editor Luzi Ann Javier told The Sun.
“Stablecoins were supposed to shield investors from the gyrations in the crypto market with its peg to the dollar.
“When that peg was broken, it shook investor confidence not just in stablecoins but across decentralized finance.”
The fall of UST and the rise of Terra 2.0
As a result of Luna’s price collapse, UST similarly bottomed out.
The coin suffered multiple shocks after Luna cratered, and UST is now at $0.07709 less than three weeks after it was at $1.
After the Terra ecosystem crumbled, Terra founder Do Kwon put the ultimate fate of Luna and UST in the hands of investors.
On May 25, Terra held a vote to revive the coins, and 65% of investors approved a plan to relaunch Luna, but scrap UST entirely.
As a result, a new Terra blockchain was created, branded as Luna, while the coin formerly known as Luna will be called Luna Classic.
Terra Labs plans to distribute new Luna coins to existing investors, with 45% of new coins directed at pre-crash Luna and UST holders.
Another 25% of newly minted coins will be given to investors who entered the Terra ecosystem after the collapse.
The remaining 30% will be distributed around the Terra community.
Many trading platforms including FTX and Bitfinex announced that they will support Luna 2.0.
Luna price prediction
With Luna Classic all but dead, all eyes are on Luna 2.0.
Wallet Investor predicts that Luna will exceed $60 before the end of the year, but may never return to the heights Luna Classic reached.
PricePrediction.net, on the other hand, predicts a slower, steadier comeback for Luna.
The site projects Luna will peak at $16.43 for the remainder of the year, and hit just $34.24 by the end of 2024, but exceed $400 within the decade.
These price predictions are never guaranteed though, so you should always do further research and proper analysis.
We’ve also revealed price predictions for other cryptocurrencies including Bitcoin, Dogecoin, Shiba Inu, dYdX, and EO.
The Sun also broke down the price of ApeCoin.
And read how Elon Musk’s plan to buy Twitter impacted the price of Dogecoin.
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