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On Saturday, Terra Luna 2.0 was sent to owners of the previous version of Terra, now called Terra Luna Classic (LUNC) and the UST stablecoin. At first, everything seemed to be in order, as investors hoped to make up for their losses after LUNC and UST collapsed and prices fell to zero.
LUNA 2.0 has been supported by various crypto exchanges, and this has helped to increase the credibility of it. However, immediately after the airdrop, things went worse. Since then, the price of the coin has been riding a roller coaster, on Kraken it ranged from $ 30 to a minimum of $ 3. On Binance, the coin started at $ 18, and now it is traded at about $ 7.5.
Looking at the charts on Coinmarketcap, you’ll see that Terra Luna is currently trading around $7.12.
Luna 2.0 Trading on rumors
Analysts have been trying to understand why Moon 2.0 has experienced these shocks over the past few days. Now it turns out that the coin is traded on rumors spread among holders.
Some investors no longer trust Terra and are willing to sell off their stashes to finally recoup some of their initial investments in UST and LUNC. This dumping creates a shift in the market and lowers the price.
On the other hand, there are those who are willing to keep their cache, hoping that Terra will work to regain the trust of the community and eventually raise the price of the coin.
Either way, cryptocurrency seems to have turned into a coin for gambling, and everyone is trying to make a profit as soon as possible.
Fadi Abualfa, head of research at brokerage Copper, told Bloomberg:
“This is pure gambling, which cryptocurrency has not yet seen. One of the most important things about cryptocurrency is the brand or marketing and the community. Terra burned her community and her brand tarnished itself. Whatever they do here, it will be pointless.”
Thomas Dunlevey said:
“This initial volatility just shows me that Luna 2.0 is now a speculative asset and is likely to be traded on a narrative basis until they can restore developer confidence to bring fundamental value to the new ecosystem.”
Thomas is a research analyst at Messari, a cryptography-related data firm.
Perhaps one of the factors that could have contributed to this chaos is the wrong LUNA 2.0 airdrop conducted by Terra. Users filed numerous claims that received less compensation compared to their UST and LUNC assets. Terra has already acknowledged this failure and promised to find a solution. However, it seems that many people in the community have lost confidence in Do Kwon’s team. Whether that changes or not will depend on how Terra handles the situation in the near future.
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