The price of the Terra (LUNA) cryptocurrency has fallen by more than 99 per cent, wiping out the fortunes of crypto investors.
Terra, which ranked among the top 10 most valuable cryptocurrencies, dropped below $1 on Wednesday, having peaked close to $120 last month. Other coins also appear to be in trouble amid a market-wide downturn.
The majority of the losses were realised overnight, with a 98 per cent price fall in the space of just 24 hours.
The dramatic crash meant its market cap dropped from above $40bn to just $500m, resulting in unprecedented losses for investors in a leading cryptocurrency.
“I lost all my life savings,” one member of the r/TerraLuna sub-Reddit wrote. “Had bought Luna at $85, not sure what to do.”
Another wrote that they had lost $15,000 after failing to sell their holdings for a substantial profit when it was trading above $100 last month.
“I should’ve cashed out when it was $100, then I would have been up $25,000,” wrote Reddit user No-Forever. “But I got greedy hoping to get more money so I can at least afford a downpayment for a house for my family. I guess no house and savings then.”
Moderators of the forum, which has more than 44,000 members, pinned a post with helpline numbers to the top of the page after users voiced concern about the consquences of the crash. “I lost over $450,000, I cannot pay the bank,” one user member of the forum wrote. “I will lose my home soon. I’ll become homeless.”
Leading crypto exchange Binance temporarily suspended withdrawals on Terra (LUNA) network at one point, meaning that even those who wanted to sell were unable to.
The Cayman Islands-based exchange cited “high volume of pending withdrawal transactions... caused by network slowness and congestion”.
The Terra crash comes amid a downturn for the broader crypto market, which has seen bitcoin fall more than 50 per cent since its all-time high of close to $69,000 in November, however the demise of LUNA has been compounded by issues with Terra’s dollar-pegged stablecoin UST.
Earlier this week, UST decoupled from the dollar and fell to as low as $0.29. The Luna Foundation Guard (LFG), which acts as stewards for UST, is currently seeking to raise over $1bn to resue the algorithmic stablecoin, though many investors believe the project to be over.
Do Kwon, who founded Terra creators Terraform Labs, tweeted on Tuesday: “Close to announcing a recovery plan for $UST. Hang tight.”
He followed this up with a Twitter thread on Wednesday, asking for patience from the community.
“I understand the last 72 hours have been extremely tough on all of you – know that I am resolved to work with every one of you to weather this crisis, and we will build our way out of this,” he wrote.
“The Terra ecosystem is one of the most vibrant in the crypto industry, with hundreds of passionate teams building category defining applications within... Terra’s return to form will be a sight to behold.”
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