In recent days, Terra (Luna) and stablecoin TerraUSD (UST) are the two cryptocurrencies that have received the most attention from investors. The father of these two cryptocurrencies is Do Kwon, a South Korean, according to Reuters.
The fact that these two cryptocurrencies have lost most of their value in a short time has shocked many investors around the world. Now, right in Do Kwon’s home country of Korea, investors have started rushing to catch Luna’s bottom. Both Luna and UST are affiliated with Terra, a blockchain platform co-founded by Korean developer Do Kwon. According to crypto analytics firm Elliptic, global investors have lost a total of $42 billion as the value of these two coins has plummeted in recent days.
Luna used to be one of the most popular cryptocurrencies in the world. The collapse of this cryptocurrency, along with the UST, messed up the market. Bitcoin lost about a quarter of its value between May 9 and 12.
Luna’s value once peaked around $100 in April, but is now trading at less than 1% of its peak, or less than $1. In Korea, investors continue to buy large amounts of Luna in the hope that this cryptocurrency will rise from the ashes. Even with what it has achieved, many people believe that Luna cannot fall.
One investor shared on Naver, a South Korean online platform: “Luna was once a major cryptocurrency by market cap, so developers will do whatever it takes to revive it.” The blogger claims to have purchased 300,000 Luna over the weekend for 0.33 won ($0.0003)/Luna through an international cryptocurrency exchange.
When investors rushed to catch the bottom of Luna, South Korea’s Financial Services Commission (FSC) warned people not to invest into Luna at the present time. The number of investors losing money in the crypto market has increased by more than 50% in just over two days at major South Korean exchanges, hitting 280,000 as of May 15, according to FSC.
Bithumb and Upbit, the two largest crypto exchanges in Korea, also said that they will temporarily stop supporting LUNA trading on May 20 and 27. Another trading platform called Coinone also stopped withdrawing UST and LUNA, and is set to stop listing the coins on May 25.
The fact that investors rushed to buy LUNA did not have much impact on the price of this coin. Terra’s token is still around 0.0001 – 0.0004 USD in recent days. However, many Koreans, especially young people, to invest in volatile and potentially risky assets, from stocks to cryptocurrencies, has made regulators worried. The enthusiasm of young investors is part of the reason why Luna and TerraUSD have entered the list of the 10 largest cryptocurrencies in the world by market capitalization. However, everything collapsed on May 10, when TerraUSD lost its 1:1 dollar peg. At the end of the trading session on May 18, Luna was traded at a price of 10 cents.
When the market plunged, hundreds of investors were outraged and repeatedly posted critical posts on social networks. There are even some people asking Do Kwon to compensate for their damage. Last week, Do Kwon announced a plan to change the system so that TerraUSD would be backed by reserves in the future, but it is unclear if this plan will work. It is difficult for the Korean government to protect investors, especially retail investors, because cryptocurrency trading is outside the scope of government regulation.
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