Chaos In Crypto Sphere Amidst UST De-pegging, LUNA Freefall And Bitcoin Plunge

May 10, 2022

Crypto market capitalization plunged to $1.46 trillion, amidst the chaos that followed the algorithmic stablecoin TerraUSD (UST) substantially losing its peg to the dollar and Terra (LUNA) losing about half of its market cap. Questions are also being raised whether Bitcoin’s price collapsing to less than $30k in the past 24 hours is a direct fallout of the UST/LUNA episode.

The trail of events in the Terra blockchain which unfolded with a whale dumping substantial quantum of the network’s UST stablecoin leading to a disruption in its dollar peg and the crash that followed in LUNA, its governance token has sent shock waves across the crypto universe.

10th ranked stablecoin TerraUSD (UST) which was at $0.9964 on Sunday, dropped to a low of $0.7934 on Monday. It is currently trading at $0.9321.

9th ranked Terra (LUNA) which traded at $64.08 and a market cap of $22 billion on Sunday, plunged to $32 and market cap of $11 billion by Monday. It is currently trading at $31.71, down 47 percent in the past 24 hours and 62 percent on a weekly basis. LUNA has slipped to the 14th rank among all crypto currencies.

Bitcoin is currently trading at $31,867.98, down 3.6 percent on an overnight basis and17 percent on a weekly basis. BTC touched a low of $29,944.80 in the past 24 hours.

Ether is trading at $2,426.09, up 0.56 percent on an overnight basis. ETH is however down 15 percent on a weekly basis.

4th ranked BNB(BNB) and 6th ranked XRP(XRP) are trading with losses of more than 2 percent.

7th ranked Solana (SOL) and 8th ranked Cardano (ADA) are trading with gains of around 2 percent.

While 11th ranked meme-coin Dogecoin (DOGE) is trading with a loss of 1.5 percent, 15th ranked meme-token Shiba Inu (SHIB) is trading with a gain of 3.7 percent.

12th ranked Avalanche (AVAX), 13th ranked Polkadot (DOT), 17th ranked TRON (TRX), 18th ranked Polygon (MATIC), 21st ranked Cronos (CRO), 23rd ranked UNUS SED LEO (LEO) and 24th ranked FTX Token (FTT) are also trading in the green zone.

The UST/ LUNA episode has reignited concerns about the financial stability implications of stablecoins. It is also bound to raise questions on the future of algorithmic stablecoin arrangements.

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