The Terra ecosystem’s two major cryptocurrencies, TerraUSD (UST) and Terra (LUNA), crashed dramatically last week. As cryptocurrencies exploded, three investors who lost thousands of dollars spoke. Saying that he was disabled due to a work accident, Corey says he lost more than $30,000.
How did the collapse of the LUNA and UST unfold?
As you can follow from Kripokoin.com news, the crypto market witnessed one of its most dramatic breaks this month with the dissolution of TerraUSD, one of the largest algorithmic stablecoins. The coin has currently dropped to around ten cents from its intended value of $1, causing buyers to suffer devastating losses.
First created in 2018 by 30-year-old Do Kwon, TerraUSD was meant to be permanently pegged and stabilized at $1. TerraUSD has been paired with LUNA, another cryptocurrency that has a price that can be exchanged and fluctuated.
As the balance between these two cryptocurrencies has become unstable in recent weeks, investors panicked and, in a move similar to a bank run with cryptocurrencies, a % of the value of the UST. It caused him to lose more than 90 percent and LUNA dropped to less than a cent from about $80 a month ago.
As the TerraUSD project exploded and other cryptocurrencies saw pullbacks, investors who bought into the idea of making big profits or finding stability in the UST were faced with the realities of a volatile market and sudden financial disaster.
UST and LUNA’s collapse speaks to crypto victims
Three people who asked not to use their full names due to privacy concerns who lost thousands of dollars in the crypto collapse shared how the collapse affected their lives. Corey, 37, from Canada, says he entered LUNA in November 2021 after researching reviews and reading Reddit comments.
“It seemed like an incredible project to me,” says Corey. LUNAzede says it has lost more than $30,000 since the decline began. While it still has a little over $1,000 in profits from other investments like Reddit favorite GameStop, its world has been hit by a sudden crisis. He says he used to work in both automated manufacturing and industrial flat roof jobs, but got into crypto after being injured and now has trouble walking.
As cryptocurrencies fell, r/terraluna, UST and LUNA’s main subreddit, was flooded with investors speculating about what happened and mourning their losses. Some users who claim to have poured tens of thousands of dollars into crypto money talk about not knowing how to recover and hurting themselves.
Others lash out at Do Kwon, who mocked critics who had previously expressed concerns about the stablecoin on social media. Amid the chaos, the subreddit was locked down against new posts last week, but users can still comment on pre-existing threads.
The severity of the losses ranges from people claiming to have lost millions to others who have just dived into crypto more recently out of pure curiosity. A 21-year-old Computer Science student from Slovenia says she took UST in early April. In a comment on Reddit, he states that this is his first crypto investment and he hopes to buy an electric car with the money. With the collapse, he states that this is no longer possible and he lost $2,200.
Others on the Reddit forum write that the token’s depreciation will have serious consequences not only for themselves but also for their families. Jen, a 34-year-old teacher, says she got into the crypto and LUNA business after hearing about it from her brother a little over a year ago. He states that he initially invested $1,000 and then added more each month. He also adds that he receives from other cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Solana (SOL).
“I believed this was a really solid project,” says Jen, who lost over $17,000 when LUNA crashed. Jen also notes in a Reddit post last week that if LUNA’s value was $100 in early April, she would have made over $25,000 if she had withdrawn the money. He thinks he lost the down payment on a house because he was greedy. The collapse now seems to have destroyed any hope of buying a home for himself and his children.
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