UST Stable coin depegs from dollar USD may Crash BTC,cause crypto death spiral

[ObscurePen]

Do you guys think Luna could come out of this?

At the moment, it is priced at $0.3045USD on CoinMarketCap. Thats a 97% drop in the last 24hrs.

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[davis196]

The market sooner or later gets rid of all the sketchy "too good to be true" projects/companies.Terra is just one of the big ones.Maybe Tether will follow.
I'm sure that there will be panic selling and a bloodbath on the crypto markets,but calling this a "death spiral" seems like exaggeration and spreading FUD to me.Bitcoin Core isn't going to be destroyed,just because some sketchy stablecoin project exploded and a the risk seeking investors lost some money.The Bitcoin Core blockchain is alright,the BTC price will be low for a while(probably one year or more),but this is fine,because:
1.Cheap Bitcoins for us to buy and wait for another bull run.
2.BTC getting cheaper would actually make the FUDsters leave the BTC market for a while.
If the BTC price was 60K right now,the FUD drama  would have been crazy.

[Kakmakr]

I do not know how fckn stupid people can be..... they selling their bitcoins to secure their Stablecoin and to try and fool more people that it is backed by something, after it was backed by nothing. (shitcoin) 

Do they really think people are going to trust them now? When people get burnt, they panic sell and they run for the hills.... so we are just going to see more UST being dumped.

We will also see more Stablecoins being dumped, because UST has now cast a dark shadow over other Stablecoins. Let's hope that capital ends up back in Bitcoin to spark a recovery. 

[mk4]

Or, if we go full tinfoil hat..
Were those coins actually bought by them with real money and they were owned by them in the first place?
Or were those coins borrowed for this purpose alone, that would have been paid with money from future sales?

Yes it was. They were openly slowly but surely converting the UST for USDC through high-liquidity stablecoin DEXs like Curve.

The other interesting part is, will there be any consequences for all the money lost, any investigations, or, the whole crypto world is just an add-on of the old system where you can run banks and companies into the ground, lose billions of people's money and not face any consequences? Cause for me it's starting to overlap dangerously close.

Terra/Luna/UST is a big enough project that it's been getting headlines on traditional news sites. I wouldn't be surprised if this fiasco would be used by the authorities to create laws against bitcoin/crypto.

[P2PECS]

Do you guys think Luna could come out of this?

At the moment, it is priced at $0.3045USD on CoinMarketCap. Thats a 97% drop in the last 24hrs.

No, I don't think so. It looks like yet another cryptocurrency that is going to disappear. To get the price back up to where it was, it is going to take huge amounts of money and I don't think any serious investor is going to consider it, as although there might be a small spike, it would be like trying to catch a falling knife:

'A falling knife is generally used as a caution not to jump into a stock or other asset during a drop. Traders will trade on a sharp drop, but they generally want to be in a short position and will use technical indicators to time their trades.'

https://www.investopedia.com/terms/f/fallingknife.asp

[FlamingFingers]

Do you guys think Luna could come out of this?

At the moment, it is priced at $0.3045USD on CoinMarketCap. Thats a 97% drop in the last 24hrs.

I don't think it can, It's a super ponzi and Do Kwon stepped on foots claiming he has best stable coin. The supply is now x3 of its initial supply. Luna is being used right now as collateral for their stable coin, that's why the token supply has tripled in the past 24hours cos they need to mint more tokens to cover the UST... If you buy luna, you're just providing exit liquidity for UST holders

[ObscurePen]

Do you guys think Luna could come out of this?

At the moment, it is priced at $0.3045USD on CoinMarketCap. Thats a 97% drop in the last 24hrs.

I don't think it can, It's a super ponzi and Do Kwon stepped on foots claiming he has best stable coin. The supply is now x3 of its initial supply. Luna is being used right now as collateral for their stable coin, that's why the token supply has tripled in the past 24hours cos they need to mint more tokens to cover the UST... If you buy luna, you're just providing exit liquidity for UST holders

Yeah you are right, I just can't get my head around it though, because you know it was one of the top 10 crypto coins and it was basically a ponzi. It has to be a ponzi because in my head, there is just no way a top 10 coin can drop 99% of its value in 24 hrs because of 'market volatility'. I never understood what the point of portfolio diversification was till now; because the way I saw it, if Bitcoin goes up everything goes up. If it goes down, everything goes down. But I've understood the hard way why you must diversify your portfolio especially in the crypto space.

[o_e_l_e_o]

Do you guys think Luna could come out of this?

I'm just looking in to Luna now, since I never waste my time on shitcoins, but the whole set up is hilarious. Does literally nobody look in to things before throwing their money away at them?

UST is pegged to a dollar because you can sell it for a dollar worth of Luna. But Luna isn't back up by anything at all, and gets created out of thin air when you convert UST for Luna. So there is an infinite sell pressure on Luna, which will drive the price to zero. Go and look at the supply, and laugh: https://fcd.terra.dev/v1/circulatingsupply/luna. It's jumping up by tens of millions every few minutes.

Who in their right mind threw money at this shit? And even now, when the supply has jumped from 300 million to 4.5 billion in 24 hours, people are still thinking about buying this and hoping for a rebound? Are you literally stupid? The next time someone calls me a "toxic bitcoin maximalist" or some other such nonsense, I'm just going to point them to this. Altcoins are 99% scams.

I never understood what the point of portfolio diversification was till now; because the way I saw it, if Bitcoin goes up everything goes up. If it goes down, everything goes down. But I've understood the hard way why you must diversify your portfolio especially in the crypto space.

This is the exact opposite message you should be taking away from this. When bitcoin goes up, everything goes up. When bitcoin goes down, everything else goes down more. Go and look here: https://www.coingecko.com/en/global_charts. Altcoins losing 2x or more the value than bitcoin is. Bitcoin dominance increasing. Portfolio diversification means buying different assets which are not intrinsically linked - it doesn't mean dumping a bunch of your money in altcoin scams which are just going dump harder than bitcoin.

[darewaller]

I do agree that this is a "test" for crypto for sure. I am not saying that it means anything substantial but it is a test. Because, there is one project that has so much money from everyone and they are claiming that they were pegged to 1 dollar, now we are seeing it not so much.

This means that if you end up trusting so much money on some projects, even if they claim they are stable, maybe they are not as stable as you think they are. This could cause people to lose a lot of money if it spreads to other projects, like if USDT suddenly starts to go down and BUSD does as well then it is not going to be that easy to recover as whole of crypto. This should pass too, and we will be fine, but it will take a good chunk with it.

[OgNasty]

Do you guys think Luna could come out of this?

At the moment, it is priced at $0.3045USD on CoinMarketCap. Thats a 97% drop in the last 24hrs.

No. It may bounce around and give people opportunity for profit, but I don’t see it actually growing organically. It was basically proven to be a Ponzi-like instrument to make people rich and then catastrophically fail. Many predicted it. I didn’t even know or care what Luna or UST was until Do Kwon started pumping the market. It was clear he was paying too much and being taken advantage of by the market. If Luma does rise again, it will be similar to the wool on a sheep growing longer. At some point they’re going to be sheered and end up naked again. Don’t be a naked sheep. Invest in real assets or if you’re going to go digital, stick to the “safer” investments, like BTC or ETH. They may fall 80% in a year or two, but at least they won’t fall 95% in 3 days…

[Haunebu]

Death spiral? Lol. Silly FUD as usual. BTC will recover from this just like it has on many occasions in the past(Some far worse than the current bear market). However, many altcoins will disappear into oblivion for sure.

Stablecoins aren't exactly stable all the time and UST has proven that in a big way. Sad to see LUNA investors completely losing it after it pretty much died just like that.

[teosanru]

You are absolutely right about this, basically, what LUNA used to stabilize the Peg of USD=1$ was they used to create more of LUNA in order to increase the total value of their USD peg available, similarly they burn LUNA in the other case, now the price has fallen so much that they will have to create a huge amount of LUNA in order to peg that value back to $1, when they go ahead to that LUNA which is already falling in price falls even further, when it falls even further, the foundation has to buy even more LUNA in order to peg the dollar value this is creating a cascading effect therefore making it impossible to protect the peg created ultimately subsiding the ecosystem, only way to protect UST is if someone buys out the whole system and backs every UST with USD. Other than that we don't have any way out.

[vapourminer]

[...] breakdown in their stability algorithm.

seemed a pretty overly complicated way to make something "stable"

Overall, I chose to take the risk and bought 250 UST for $100 .

what are you my alter ego? i threw a few bucks at it for the lulz too. already down 50% from my entry point this morning of course im sure its a goner but sometimes it fun to be part of a huge mess just for the entertainment.

r/wallstreetbets? lulz hold my beer

Are you literally stupid?

errr now that you mention it..

[Franctoshi]

Death spiral? Lol.

It already happening looking at the time when I publish this post and the price of Bitcoin as at that time was trading around $30k-$32k per Bitcoin.
We could still get another dump because of the mass panic and have more people sell , for instance some legendary investors and long term BTC holders would sell to meet margin call regarding this very event because most investors would sell to protect their funds from further crashing lower than the price they bought and likely get back when the Storm is over, I do believe that Luna foundation guard LFG might have sold all the Bitcoin in their reserve.

[Yogee]

Do you guys think Luna could come out of this?

At the moment, it is priced at $0.3045USD on CoinMarketCap. Thats a 97% drop in the last 24hrs.

Their entire ecosystem collapsed so fast so it's hard to see them coming back  unless someone with a huge bankroll comes to revive it. Some speculators will try to play and may cause a little bounce but will also leave as soon as they have taken a little profit.

Okay so I checked to price and it's now down by over 99% from ATH hehe. It's already a ghost.

[ObscurePen]

Do you guys think Luna could come out of this?

I'm just looking in to Luna now, since I never waste my time on shitcoins, but the whole set up is hilarious. Does literally nobody look in to things before throwing their money away at them?

UST is pegged to a dollar because you can sell it for a dollar worth of Luna. But Luna isn't back up by anything at all, and gets created out of thin air when you convert UST for Luna. So there is an infinite sell pressure on Luna, which will drive the price to zero. Go and look at the supply, and laugh: https://fcd.terra.dev/v1/circulatingsupply/luna. It's jumping up by tens of millions every few minutes.

Who in their right mind threw money at this shit? And even now, when the supply has jumped from 300 million to 4.5 billion in 24 hours, people are still thinking about buying this and hoping for a rebound? Are you literally stupid? The next time someone calls me a "toxic bitcoin maximalist" or some other such nonsense, I'm just going to point them to this. Altcoins are 99% scams.

I never understood what the point of portfolio diversification was till now; because the way I saw it, if Bitcoin goes up everything goes up. If it goes down, everything goes down. But I've understood the hard way why you must diversify your portfolio especially in the crypto space.

This is the exact opposite message you should be taking away from this. When bitcoin goes up, everything goes up. When bitcoin goes down, everything else goes down more. Go and look here: https://www.coingecko.com/en/global_charts. Altcoins losing 2x or more the value than bitcoin is. Bitcoin dominance increasing. Portfolio diversification means buying different assets which are not intrinsically linked - it doesn't mean dumping a bunch of your money in altcoin scams which are just going dump harder than bitcoin.

Yeah you are right now that I think about it haha. Update: Its now worth $0.0128USD. That is absolutely fcked. There is no way they are coming out of this. I don't even think they will 'rebound' even a little.

You know the funny thing that I realised is that Luna claimed to be better than Bitcoin as a more usable 'currency'. The hilarious thing is their network was backed by Bitcoin. So if anything went wrong with their system they were going to sell the Bitcoin in their Luna Foundation Guard and try fix it. Jeez what a fcking scam. I feel sorry for those who had a lot of money in Luna. Because at the moment, it is worth just a few cents. Hopefully they learn from their mistakes that only Bitcoin is worth anything.

[DaveF]

As I said above a lot of people are or were operating under the assumption that this was a legit project.
I am still not sure if it was or not of if it was a long con, never looked into it so I can't comment, but remember people will fall for a lot of things.
In the end it probably bumped the price down a little but with all the other downward pressure at the moment, not that big a deal IMO.
People believe what they want to believe, not crypto related but: https://twitter.com/GeorgeTakei/status/1524836871460769801

-Dave

[DooMAD]

And yet a whole bunch of the people who got burned with this will just pour their remaining funds into some other so-called-stablecoin (shitcoin).  And then they'll act surprised when that one fails too.  Greed makes people dumb, I guess.  Too busy buying the hype to notice the con.

[hd49728]

Their products have some death points which they should realize at begining when they build it. What Terra did with UST and LUNA is partially similar to margin trading and liquidation on the market. Traders are not safe if the collateral asset is Bitcoin, altcoins because when price of collateral asset is down deeply, their position will be liquidated.

Now you can add stablecoin into bad asset list for collateral. I don't understand why Terra comes up with the idea, totally algorithm, smart contract based stable coin which is backed by other coins even they are Bitcoin or Ethereum

[blockman]

Do you guys think Luna could come out of this?

At the moment, it is priced at $0.3045USD on CoinMarketCap. Thats a 97% drop in the last 24hrs.

Unknown with that question. No one has the answer and it's 99% down or let's say that it's already 100% since it's too far from the normal price and ATH that it has met before.
Well, it's probably safe to assume that everybody has to stay away from them if it's making you think that you should put your money on them. Like they say, it's totally devastated and their economy crumpled.