There are a few reasons cited for why the Luna crypto coin fell so precipitously in value. One reason is that the supply of Luna grew, causing the price to collapse. The rising supply pushed Luna off the seesaw.
The balancing mechanism that balances TerraUSD and Luna began failing as more and more buyers attempted to get rid of their TerraUSD. The stablecoin dropped to $0.14 on Friday, 13 May 2022.
Luna may have also been hurt by the overall weakness in the cryptocurrency market. After a strong start to the year, crypto prices have been on a downward trend in recent months. This has weighed on sentiment and could have contributed to the sell-off in Luna.
Looking ahead, it remains to be seen if Luna can recover from this sell-off. If the overall cryptocurrency market stabilizes, that could provide a tailwind for Luna. However, with the supply of Luna still relatively high, it may take some time for the price to rebound.
The crypto industry is falling now, should I invest?
No one can predict the future of the crypto industry with complete certainty. However, there are a few things we can examine to help make a more informed decision about whether or not investing in crypto right now is a good idea.
First, let’s take a look at the current state of the industry. The value of Bitcoin, the most well-known cryptocurrency, has fallen by over 60% since its all-time high in November 2021. This is mirrored by the overall decrease in value of the crypto market, which is currently down by over 70% from its peak.
This doesn’t mean that crypto is dead or that it’s not worth investing in anymore. However, it does mean that anyone considering investing in crypto should be aware of the risks involved.
The good news is that the fall in value has led to a decrease in transaction fees and waiting times, as well as an increase in the number of available tokens and coins. This could make investing now more attractive than it was during the height of the market.
Of course, no one can know for sure what the future of crypto will be. However, if you’re thinking about investing, doing your research and being aware of the risks is always good.