Manipulation made by using images from Public domain
source to all images used: sky1, mountain, snow, hands, and Luna logo
On the 10th of May, I brought Luna/USDT while the market was down. Before buying Luna, I had investments in some other cryptocurrencies which were also 30% lower at that time. That night, my friend called me to, tell me that he brought Luna/USDT and it was available for a very cheap price. So I searched on google and saw the reason for the drop in price as the "UST failed to peg" the stable price. So looked up the graph of TerraUSD (UST) and noticed that it was 15-20% lower than usual. After that, I searched about Luna on google and saw that Luna was in the Top 10 cryptocurrencies and it was a competitor to Ethereum and that gave me the trust to invest in Luna while it was falling. At that time, I never imagined Luna will continue to drop and I thought the reason for the drop was due to the market crash. I brought 6 Luna coins at that night from everything I had and I remember waking up the next day and I only had about 1 USDT in my wallet. And next day I saw Binance delisting Luna and Indian exchanges banning Luna crypto buying.
The Reason Why Luna Lost it's 99.9% of its Value.
Many people believe that the only reason for the Luna Crypto's drop was just due to
Reason 1: "UST failing to Peg" its stable price and
Reason 2: Whales leaving Luna.
many people are still believing that by using the BTC and other reserves that they are holding, Luna can come back to its previous price at any point in time.
The reserves they are having according to LFG are listed below.
Ā· 80,394 $BTC
Ā· 39,914 $BNB
Ā· 26,281,671 $USDT
Ā· 23,555,590 $USDC
Ā· 1,973,554 $AVAX
Ā· 697,344 $UST
Ā· 1,691,261 $LUNA
In my opinion, the Luna Cryptocurrency can never reach the previous price or even a price mark of 1 dollar in the next 20 years. The biggest thing that we need to keep in mind before investing in Cryptocurrencies is the Total Market Cap and Total supply of the crypto that we are investing in and also we should be aware of the projects under it.
The main reason for the drop of 99.9% in Luna was due to the increase in the market supply of the token from millions to trillions for stabilizing the UST peg to a 1:1 ratio and that left most of the investors who were holding Luna tokens before and after May 10th to a total loss of 99.9%. Even after increasing the total supply of the Luna, the UST was not able to keep up a 1:1 ratio. That means the algorithmic stable coin UST is a failure.
Cryptocurrencies like BTC have a fixed market supply of 21million. The coin also has better trust, security and a bright future. After it reaches the maximum supply of 21Million, no one can increase the market supply as Luna (LFD) did and for that reason, we will see a huge price increase in BTC after that and that's the reason why many crypto experts suggest us to invest in Bitcoin.
Conclusion
Manipulation made by using images from Public domain
Doge and Shib Coin, Table top and Luna logo
For Luna to have the same price as of May 5th, the luna should have 8965 times more investments than it had on May 5th (that is 6.5 trillion / 725 million) and that is impossible as it has a large denominator leaving it into a penny cryptocurrency for the rest of its life. Luna lost the trust of investors and also exchanges. This crypto has an unlimited market supply and that will be a huge risk to the investors. There is no guarantee that they will increase the market supply again and if they do, people who are buying Luna at the dip will go into further loss. So it's not wise to invest in Luna.
Things that, I learned from Luna
- Never catch a falling knife
- Never have an investment in a single token
- Never be greedy