Terra (LUNA) Price Prediction 2025-2030: LUNA’s future depends on this factor
It has now been nearly ten months since the crypto project Terra Luna experienced a catastrophic collapse in May last year. Later, FTX collapsed and recently, the crypto-friendly Silicon Valley Bank (SVB) collapsed.
As the SEC charged Terra founder Do Kwon with fraud over the $40 billion crypto crash, it has adversely affected the market. As there is hardly any positive news regarding its price movement, we cannot deny the fact that LUNA will never be considered a ‘safe’ cryptocurrency. Therefore, it may not be able to return to its former heights again.
Read Price Prediction for LUNA 2023-24
Stablecoins, such as UST, were created to protect investors from the extreme price volatility of popular cryptocurrencies, such as Bitcoin (BTC).
As fiat currency is pegged to reserves such as gold, a stablecoin is pegged to either a fiat currency (e.g. USD) or a supporting cryptocurrency. In this case, TerraUSD was pegged to Luna. But herein lies the conflict. A cryptocurrency isn’t equivalent to gold reserves. As LUNA prices got destabilized, it had an impact on UST prices too, and the entire stablecoin system collapsed in the second quarter of 2022.
The stablecoin project was aimed at complementing the price stability and wide adoption of fiat currencies with the decentralized model of cryptocurrency.
Even those who are only vaguely familiar with the cryptocurrency industry know of the apocalyptic collapse of LUNA and UST in May 2022. This collapse was crucial in instigating the cryptocurrency crisis thereafter.
LUNA was one of the market’s top performers once, with the altcoin once among the top 10 cryptocurrencies by market value towards the end of 2021.
A Bloomberg report from May 2022 sheds light on the further developments
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