The world of cryptocurrencies has been experiencing a lot of volatility in the last couple of months, especially when compared to the green market of gains and bull runs we experienced through most parts of 2021.
We all know that crypto investing is something not to approach carelessly. Cryptocurrencies are high-risk speculative assets and getting rich out of your investment could be as likely as completely losing all of the money you put into it.
The prices fluctuate in big part because of the influence of investor and user sentiments as well as media hype and even macroeconomic factors.
The fall of LUNA and UST was an eye-opening experience for many, and a disruptive factor in the crash that cryptocurrencies have been experiencing lately as a whole. So, when the news regarding the LUNA ecosystem being revamped into LUNA 2.0, critics and investors who lost a big chunk of their savings, lashed out with a lot of scrutiny about this move from Do Kwon.
This new Terra chain only came with a Luna replacement, and ditched the closely related stable coin which was one of the main factors of the crash, as the price of UST kept its peg to the one dollar mark to the detriment of LUNA.
Terra Luna received a new “lease of life” and it is already going live in multiple exchanges, that said, it had a rocky start, as its price plummeted over 70 percent just hours after its debut, with most of the crypto community frowning in disapproval at the whole situation.
Prominent internet figure and cryptocurrency investor Lark Davis shared with his over 1 million followers on Twitter:
“Zero plans to buy $luna 2.0, but I will dump any airdrop if I get something on Binance.”
After the catastrophic failure of UST and the effects it had in the eyes of the crypto community, the credibility of Do Kwon (Developer and CEO of Terraform Labs) was almost completely lost, with only a few believers and a handful of speculators expecting the recovery of the whole ecosystem.
Not only that but the reputation he had was also deeply eroded, with controversy and accusations now plaguing Terraform Labs, with local media now reporting Terraform Labs staff being subsequentially summoned by South Korean officials and sites such as Bitcoin.com reporting on Do Kwon dissolving Terraform Labs moments before the de-pegging incident began.
The old Luna coin now called luna classic (LUNC) has surprisingly started jumping in price, with people on social media showing support and trying to pump the old network while dismissing the new coin.
These extreme moves in volatility certainly caught the attention of speculators who seek to get quick gains out of the whole Terra Luna situation, while previous holders grieve about their losses and try to recoup their vanished investments.
Fabi Aboualfa, head of research at crypto prime brokerage Copper said:
“This is pure gambling like crypto has never seen”
Crypto analyst in general stay on the bearish side when talking about the new Terra blockchain and the initial volatility we talked about earlier, labels Luna 2.0 as a very speculative asset and would most likely end up gaining or losing value depending on the narrative surrounding it, until the chain and its founder regain the trust of the community and start bringing fundamental value to the ecosystem which was lost with their latest decisions on where to take the project as a whole.
Not only that but there have also been issues with the airdrop of Luna 2.0, with some investors receiving fewer coins than they should, which prompted Terra’s team to tweet about working actively on a solution, further boosting the disapproval of their own investor base.
As for previous Luna holders, selling now would be basically adding insult to the injury, most of them hold with the hopes of recouping at least a percentage of their initial investments, it would be a matter of time to see how this situation evolves, and if it ends up affecting other stable coins as the index of fear from investors skyrockets.
Isaac Vitales