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South Koreans are diligently buying their native Token Terra, despite a massive crash last week. Notably, several retail investors believe that LUNA, previously in the top 10 crypto assets, will demonstrate an incredible recovery.
Speculators hope for a return
LUNA, Terra’s own blockchain token, showed promise at the start of the year, challenging the overall downward crypto trend and even setting a new all-time high just over a month ago at $119, while other major coins were testing lows. However, these milestones were short-lived, as last week everything collapsed and the asset lost 99.99% of its value, currently trading at $0.0001334.
Because the price of Terra (LUNA) is so low, South Korean crypto speculators have been aggressively buying up the coin in the past couple of days, believing there is nothing to lose. On Thursday, a Reuters report showed that the number of LUNA holders in the Asian country increased by more than 50% on major local exchanges in 48 hours.
An encouraging South Korean blogger who reportedly purchased 300,000 LUNA over the weekend wrote:
“Luna was once a major coin in the top ten by market cap, so they will do their best to revive it.”
Meanwhile, pressure from buyers has had no effect on the rise in the price of the crypto asset, which continues to fall and has now fallen by 23% over the past 24 hours.
Following the collapse of the ecosystem, South Korean developer and co-founder of Terra Do Kwon unveiled plans to compensate holders of TerraUSD (UST) — the algorithmic stablecoin whose collapse led to the devaluation of LUNA — while proposing plans to rebuild the Terra network. However, Kwon’s latest plan to create a new network from the old one met with stiff resistance from the community.
One of the biggest factors in the devaluation of LUNA was the excess LUNA minted in response to the de-peging of the UST. As a result, instead of forking the Terra blockchain, much of cryptocurrency Twitter and potential investors are calling for a reduction in supply.
Regulators concerned about ongoing LUNA purchases
After a sudden increase in LUNA purchases, the South Korean Financial Services Commission (FSC) warned against luna purchases. Regulators remain concerned about the trend of young South Koreans to buy the asset, despite the continued fall in prices and the lack of a clear plan for the revival of Terra.
It is worth noting that at the moment Do Kwon is not in the best way, as there are reports of possible lawsuits against the developer.
Meanwhile, several major crypto exchanges in South Korea are preparing to suspend support for the asset. Bithumb and Upbit, South Korea’s two major exchanges, announced that they will suspend trading support for Luna on May 27 and 20, respectively, while Coinone banned deposits in cryptocurrency ahead of a likely delisting on May 25.
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