Terra UST Stablecoin FREE FALLED To 26 Cents

May 11, 2022 2:44 pm Comments

If you know anyone that was holding LUNA or UST you might want to offer them words of comfort today.

Terra USD also known as UST free falled to 26 cents.

The stable coin (which isn’t stable at all anymore) was meant to be pegged to the U.S. dollar and was considered a safe investment.

Luna the sister token of UST also took a major tumble and went as low as 96 cents which is a major drop from its all-time high of $119.18.

CNBC shared these details:

The two main tokens from embattled crypto project Terra went into free fall Wednesday.

TerraUSD, or UST, plunged to as low as 26 cents. The so-called stablecoin is meant to maintain a 1-to-1 peg with the U.S. dollar. It was last trading at around 68 cents, according to Coin Metrics data.

Sister token luna at one point dived to less than 90 cents before recovering slightly to $1.72. The coin has lost roughly 96% of its value in the past seven days, and now has a smaller market value than its stablecoin counterpart.

Blue-chip tokens bitcoin and ether saw wild swings throughout the day as traders monitored UST’s descent as well as hotter-than-expected April inflation data. Bitcoin was last up 1% at $31,377, having previously slumped below $30,000. Ether fell 1% to $2,309.

Stablecoins are akin to bank accounts for the crypto economy, offering a sound store of value to avoid the kind of volatility cryptocurrencies like bitcoin have become notorious for — in theory, at least.

Yahoo Finance got the scoop too:

The value of LUNA plunged on Wednesday as Terraform Labs creator Do Kwon laid out a plan to save its sister token, the stablecoin TerraUSD (UST).

In the last 24 hours, roughly $10 billion have been drained from LUNA. Its price has fallen 93% in that time from $32 to $2.25 per coin, with the price changing rapidly each minute. After skidding to a low of 30 cents per coin, UST has ratcheted up more than a quarter to 64 cents.

On Twitter Wednesday, Kwon called for destroying a “billion in UST” while “significantly” diluting LUNA’s price further.

The move comes after both UST and LUNA have lost tens of billions of dollars in value over the last week and as investors and analysts try to gauge what the potential demise of both coins could mean for the crypto sector.

According to Kwon’s tweets, the recovery proposal — which looks to be passed by vote from the Terra community — would allow investors to sell UST for LUNA, effectively adding price pressure to LUNA in an effort of bringing UST back to its $1 peg.

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