While the crypto market consolidates, LUNC prices soared by more than 20% in the past week. This comes as no surprise, as LUNC became a pump-and-dump token used for making a quick buck. Now that the new year is ahead, should LUNA investors expect a LUNC crash to 0 $? Or will Terra come back to life? Let’s analyze in this LUNC prediction article.
What is Terra Crypto?
Terra is a decentralized, stablecoin-based payment network that aimed to enable fast and cheap transactions across different blockchains. The network uses a family of stablecoins, each of which is pegged to a different fiat currency, as its primary currency. The most well-known stablecoin in the Terra family is TerraUSD (UST), which was pegged to the US dollar.
Why did Terra Crypto Crash?
A variety of different cryptocurrencies make up the algorithmic stablecoin UST. Under normal market conditions, the arbitrage activity that keeps UST pegged is successful. However, one-sided buys or sells can’t maintain equilibrium during strong crypto market bear markets. This typically breaks the peg, and this is exactly what happened with UST. Depending on which side was violated, this necessitates strong involvement, such as excessive purchasing or selling.
The above was coupled with mismanagement from the founder of Terra. This caused chaos in the crypto market, especially since the crypto market was already crashing.
Where is Kwon Terra now?
Kwon Do-Hyung, sometimes known as Do Kwon, is a South Korean co-founder and CEO of the Terraform Labs organization located in Singapore. Kwon no longer resides in Singapore. He is now thought to be somewhere in Europe. Back in Singapore, Kwon is facing a $57 million class action lawsuit brought by more than 350 foreign investors.
LUNC Prediction: Will LUNC crash to 0 $ in 2023?
When a token price crashes to 0 $, this means that the project is no longer active. After the big scandal of Terra, a lot of effort went into starting things from scratch, introducing the new token LUNA. However, with the current market dynamics, it is even harder to gather trust anymore, especially in a failed crypto project.
Bitcoin might crash to 10,000$ according to crypto analysts. If this happens, the entire crypto market should follow, including Terra’s market cap. This means that the current market cap of LUNC which stands at around $940 billion can drop to $470 billion. The worst case would be a total collapse of Terra as a company, which might not necessarily occur since there are still projects using Terra.
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