The digital currency LUNA recorded a noticeable collapse within a few days and lost more than 90% of its market value and reached a record low near $2 only on Binance, coinciding with several developments regarding the digital stablecoin Terra UST whose value has deteriorated dramatically Recently.
Analyzes indicate that the correlation between Luna and Terra stablecoin is the primary cause of its strong losses, as users can get Terra UST by burning LUNA coins and vice versa, thus investors can use the swap feature for UST and exchanged for LUNA.
And in the past days, there were a lot of negative developments for the Terra project, which caused a series of problems, as the price of the digital currency Terra UST fell to $ 0.225 today, May 11, which means that what was supposed to be a stable coin has lost nearly 80 % of its value within a few days, which reflected negatively on the digital currency LUNA, which fell to about 2.5 dollars.
During today’s trading, Luna’s digital currency decreased by 91.93% and recorded about $2.59, bringing its capitalization down to $2,141,153,101.63, with a daily trading volume of $13,796,404,099.24, and it occupies the 32nd place among the most popular digital currencies in terms of market capitalization.
Also, the UST digital currency decreased by approximately 44% and recorded about $0.5125, and its market value decreased to record about $7,584,544,398.34, and it occupies the 14th place in the ranking of the most famous digital currencies in terms of market capitalization.
In addition, news reports previously revealed that the Luna Foundation, the Luna Foundation Guard, announced a lending to market makers via a sale of $1.5 billion worth of Bitcoin that was designed to defend the stablecoin peg, a process that contributed to accusations of a lack of transparency by the Terra founder. As he made the decision due to its impact on all UST holders and demanded more information and further clarification, which has had a negative impact on the cryptocurrency project over the past few days.