Jakarta, CNBC Indonesia – Crypto token prices have fallen this week. The prices of the two cryptocurrencies with the largest market caps, namely Bitcoin and Ethereum, dropped 14% and 20% respectively during the week.
The price of Bitcoin has even fallen from the psychological level of US$ 30,000/BTC. Lastly one Bitcoin is priced at US$ 29,778/BTC. This value is equivalent to Rp 431,781,000/BTC with an assumed rupiah exchange rate of Rp 14,500/US$. Even earlier in the week BTC had collapsed to the level of US $ 26,000 per coin.
The drop in the price of Bitcoin follows a major scandal in the crypto market involving two coins, Terra and LUNA.
Terra or UST is a stablecoin. This means that the party who created this coin promised to make the token price stable at around US $ 1. However, the price of the stablecoin plummeted and made its sister coin LUNA also lose 99.9% of its market value.
For information, sAt first issue, it was valued at US$ 0.8 per coin and hit an all-time high of US$ 119.55 per coin in April. It was even once one of the crypto assets with a large market capitalization of US$ 40 billion.
Terra LUNA has a vital role to play in stabilizing the price of the Terra stablecoin and reducing market volatility. When the stablecoin drops slightly then Terra LUNA will be burned as a way for prices to stabilize.
Terra is the only jumbo market cap stablecoin that doesn’t have any backing assets like other stablecoins and relies solely on market arbitrage.
Do Kwon, the coin’s creator, is trying to set things right trying to get TerraUSD back to its target price of US$1. His way of increasing the rate of minting new LUNAs per day.
“I understand that the last 72 hours have been very difficult for all of you – know that I am determined to work with all of you to overcome this crisis, and we will build a way out of this,” he said. CNBC International.
Investors expect new capital injections with the aim of boosting the project. TerraUSD backers are reportedly even seeking to raise more than $1 billion in funding.
However, the international head of crypto exchange Luno, Vijay Ayyar, said Do Kwon’s announcement did not create a confidence boost for investors.
“They are letting the system run out of steam in the hope that investors will re-enter when the ‘excess’ supply of TerraUSD is exhausted,” Ayyar said.
Do Kwon is known to have accumulated billions of dollars worth of Bitcoin in his Luna Foundation Guard. With the aim of supporting TerraUSD in times of crisis.
The fear is, at this time Do Kwon will throw Bitcoin into the market and actually produce a bigger sell-off that will make the price of Bitcoin even more eroded.
CNBC INDONESIA RESEARCH TEAM
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