Terra plunges back to earth as UST loses dollar peg

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– UST’s collapse had precisely the characteristics of a good old-fashioned bank run.
– The overall dynamic is not difficult to pin down USTs collapse had precisely the characteristics of a good old-fashioned bank run.
– When the price of UST lost its peg to the greenback at the weekend, the Luna Foundation Guard tried to prop it up with US$750 million of Bitcoin. The sudden dumping of such a large amount of Bitcoin resulted in US$250 million of liquidations in the BTC market and US$1 billion in the crypto market more broadly. That instability propelled UST into a positive feedback loop as its price continued to slide. That saw LUNAs price collapse to its lowest level on record.
– Metas arrival on the NFT scene comes as interest in digital collectibles has waned, to put it mildly. Sales of NFTs are down 92% since September, with projects seeing inflated prices slashed as investors try to exit what appears to be a bear market.
– Chinese state medias warnings against speculative non-fungible token (NFT) trading are falling on deaf ears as investors flock to social media to participate in black market auctions. Some state media outlets have even launched their own digital collections, dubbed digital collectibles in China rather than NFTs in a semantic effort to distance them from the NFT trade elsewhere.

LUNA crash landing Terra plunges back to earth as UST loses dollar peg
Terra plunges back to earth as UST loses dollar peg 2

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