TERRA Luna Classic has suffered major losses this year.
In fact, the cryptocurrency has been trading with multiple zeros now.
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Over the last 24 hours, Terra has risen by 3% to $0.0001015 , according to CoinMarketCap.
While it enjoyed strong gains in 2021, the crypto Luna plunged below $1 in early May, spelling its demise and the downfall of a linked crypto.
It is all but the ashes of Luna and another coin called UST emerged Luna 2.0, which opened for trading for $18.98 on May 28.
But Luna 2.0 has struggled too.
In May, Luna 2.0 reached a high of $19.54 but plummeted as low as $3.63.
And it’s gotten even worse.
As of midday today, Luna 2.0 is worth $1.76, according to CoinMarketCap.
Meanwhile, Terra Classic saw its first major spike last summer and climbed through the fall and winter.
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The coin’s value has plunged significantly since hitting $119.18 in early April.
Currently, it’s sitting at $0.0001017, according to CoinMarketCap.
These two examples are the reason why the crypto space is considered to be a risky business.
As with all investments, you must be aware that it’s not a guaranteed way to make money.
In particular, cryptocurrencies 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.
There’s also scant regulation for cryptocurrency firms, meaning you’re likely left 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 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, with the UST once trading with a few zeros.
While it has recovered it is still only trading at $0.02776, down significantly from its $1 level in April.
After the Terra ecosystem crumbled, 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, with 65% of investors approving 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.
Terra Classic price prediction
But some are left wondering still about Terra Classic and if it will ever rebound to old levels.
Well, Wallet Investor isn’t optimistic about it, projecting it will be 0.000162 in 12 months and just $0.000436 in five years.
Another crypto forecaster PricePrediction sees the price averaging to $0.00022753 in 2023.
By 2031, it projects Terra to hit $0.005.
So it appears unlikely at best that it will recover to trading dollars as it did in May and in the past.
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.
