Terra’s UST stablecoin finally falls through the ice and Do Kwon addresses community – BTC Direct

Yesterday, Terra’s UST stablecoin ran into serious trouble after its price dropped to $0.65. To save the project, the Luna Foundation Guard sold large amounts of bitcoin and everything was done to bring the price back to 1 dollar.

A downward spiral

It has failed to do so as at the time of writing, UST is trading at USD 0.33. Together with UST, the LUNA token of the Terra protocol also went down and fell by 85 percent to 2.42 dollars (2.29 euros).

At the same time, the fall of Terra’s stablecoin is causing a major flight to bitcoin. In a panic, everyone is trying to get rid of their UST and that triggered an interesting new all-time high for bitcoin.

The bitcoin price, measured in UST, briefly shot to 137,999 dollars (131,009 euros) and is currently trading at 76,838 dollars (72,988 euros). Of course we cannot speak of a real new all-time high for bitcoin, since you no longer get a full dollar for a UST.

Do Kwon addresses the community

The major rescue plan for UST and the Terra protocol has not paid off. This naturally causes great unrest in the Terra community and Do Kwo comes with an explanation via Twitter. “Dear Terra Community, I understand that the past 72 hours have been extremely difficult for you. Know that I am willing to work with each of you to get through this crisis, we will build from this. Together,” said Do Kwon in his first reaction to the fiasco.

Among other things, the protocol uses the LUNA token to stabilize the price of UST. “The only way that is now open means that LUNA has to absorb all the blows from people who still want to leave UST before the exchange rate can return to 1 dollar. There is no other way,” Do Kwon continues his story on Twitter.

Doubtful new all-time high for bitcoin

After the huge wave of sales, which according to some coordinated attack was on protocol, so UST has lost its peg to the dollar. An odd consequence of UST’s failure is another ‘all-time high’ for bitcoin on Binance. The price almost reached 140,000 dollars (133,000 euros). Which may also be a result of the fact that it is no longer possible to remove UST and LUNA from Binance.

Even if we look past the dubious new record price of bitcoin, the asset is doing surprisingly well. A new dip below 30,000 dollars (28,500 euros) was prevented and bitcoin is now trading fairly stable above that. “I think bitcoin has held up surprisingly well in the LUNA saga of forcibly selling bitcoin. However, there is still a lot of uncertainty in the market, but for now the price is holding up well at $30,000,” said Philip Swift, founder of analytics platform LookIntoBitcoin. We’ll see what the next few days to weeks have in store for UST, LUNA, and the Terra Protocol.

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