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UST crash sends Luna to $0 as stablecoin crypto rout continues

As TerraUSD (UST) value continues to slide, related cryptocurrency Luna hit a value of $0

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Cryptocurrency markets continue to be a tizzy as recent fall of TerraUSD (UST) value dropped from its supposedly pegged one-to-one position with the US dollar, causing the value of related cryptocurrency Luna to hit a value of $0. It’s been a rough week (or few weeks depending on how you look at it) for cryptocurrency. Recently, faith and investment in cryptocurrency NFTs has been shaken as factors such as global inflation continue to be a problem, and UST’s falling value has been a major ongoing story in this trend.

Luna’s value hit the full-out 0 mark within this last week and has remained without worth for a worrying amount of time, as seen on CNBC charts. The reason for this is Luna’s relationship with TerraUSD. The latter is a “stablecoin” that was supposed to remain on par in value with the US dollar. To do this, a UST token is created by destroying Luna in order to maintain limited distribution and maintain the dollar value.

Luna's value hit $0 following TerraUSD (UST)'s slip in value from the $1 peg this week.
Luna's value hit $0 following TerraUSD (UST)'s slip in value from the $1 peg this week.

Unfortunately, TerraUSD was unable to keep its value at the US Dollar point. Earlier this week, UST and Luna lost 50 percent of their value and that slide kept going. At this time of writing, UST value has dropped to under $0.15 USD per unit. As a direct result, Luna has become virtually worthless for the time being. With the TerraUSD and Luna crash this week, other cryptocurrencies also dropped in value as investors grew nervous and panicked. Even stronger cryptocurrencies like Bitcoin saw a dip in value throughout the week, dropping from a start of around $34,000 a unit to a low of just over $26,000, though it has since bounced back over the $30,000 at this point.

Luna and stablecoin creator Do Kwon has suggested that a recovery plan is on the way and asks holders to maintain trust. However, it looks like it’s going to be increasingly difficult to keep faith in UST or Luna if something doesn’t change drastically in the near future. Stay tuned as we continue to follow this story for further updates.

Senior News Editor

TJ Denzer is a player and writer with a passion for games that has dominated a lifetime. He found his way to the Shacknews roster in late 2019 and has worked his way to Senior News Editor since. Between news coverage, he also aides notably in livestream projects like the indie game-focused Indie-licious, the Shacknews Stimulus Games, and the Shacknews Dump. You can reach him at tj.denzer@shacknews.com and also find him on Twitter @JohnnyChugs.

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