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Bitcoin investors are panicking as a controversial crypto experiment unravels



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 2 months ago '11        #1
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Sin  topics gone triple plat - Number 1 spot x51
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Bitcoin investors are panicking as a controversial crypto experiment unravels
 

 
KEY POINTS
-Crypto investors are keeping a close eye on UST, a controversial stablecoin, as the organization that supports it is sitting on billions of dollars in bitcoin.
-Terra’s UST token sank below 70 cents late Monday, as holders continued to flee the controversial stablecoin.
-Traders worry the project might have sold, or will sell, a large portion of its bitcoin to prop up UST.


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Investors in bitcoin are in panic mode as the controversial terraUSD stablecoin slips further from its intended $1 peg.

TerraUSD, or UST, sank below 70 cents for the first time late Monday, as holders continued to flee the token in what some have described as a “bank run.” The token fell as low as 62 cents before regaining ground to trade at 90 cents Tuesday, according to Coinbase data.

Created by Singapore-based Terraform Labs in 2018, UST is what’s known as an “algorithmic” stablecoin. Part of the Terra blockchain project, it’s meant to track the value of the dollar, like fellow stablecoins tether and USDC.

However, unlike with those cryptocurrencies, Terra doesn’t have cash and other a*sets held in a reserve to back its token. Instead, it uses a complex mix of code — alongside a sister token called luna — to stabilize prices.

It’s important for bitcoin investors as Luna Foundation Guard, an organization supporting the Terra project, is sitting on billions of dollars in bitcoin that could potentially be dumped onto the market at any point.

″Every professional investor in crypto has one eye on UST today, watching to see if it can maintain its peg to the dollar,” said Matt Hougan, chief investment officer at Bitwise a*set Management. “There’s clearly significant risk in the market.”

In simple terms, the Terra protocol destroys and creates new units of UST and luna to adjust supply. When the price of UST falls below the dollar, it can be taken out of circulation and exchanged for luna, making UST’s supply more scarce and boosting its price — at least, that’s how it should work in theory.

To further complicate things, Terra’s creator Do Kwon bought $3.5 billion worth of bitcoin to provide a backstop for UST in times of crisis. The theory was that UST could eventually be redeemed for bitcoin instead of luna, but this is untested and hasn’t yet been put into practice.

On Monday, Kwon’s Luna Foundation Guard said it would lend $750 million worth of bitcoin to trading firms to “help protect the UST peg,” while a further 750 million UST will be lent out to buy more bitcoin “as market conditions normalize.”

In a follow-up tweet, the organization said it had withdrawn 37,000 bitcoins — worth over $1 billion at current prices — to lend out. “Very little” of the borrowed bitcoins have been spent, Luna Foundation Guard said, but it is “currently being used to buy” UST.

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Several crypto investors are also worried that Luna Foundation Guard might have sold, or will sell, a large portion of its bitcoin to prop up UST. Amid all of this uncertainty, UST’s decline has sent shockwaves throughout the crypto market.

Bitcoin, the world’s largest digital currency, briefly fell below $30,000, hitting its lowest price since July 2021. As of 7:00 a.m. ET, bitcoin was trading at $31,324, down around 5% in the last 24 hours. It’s now down more than 50% from its November all-time high.

Luna, UST’s counterpart, has roughly halved in value in the past 24 hours. It was last trading at a price of $32.

Adding to UST holders’ woes, Binance, the largest crypto exchange by market volume, said Tuesday it is temporarily suspending withdrawals of both UST and luna “due to a high volume of pending withdrawal transactions,” citing network congestion.

The firm said it would resume withdrawals for the tokens once the network stabilizes.

“I think the market is expecting some forced selling here on the part of Terra and the reserve,” Nic Carter, co-founder of Coin Metrics, told CNBC. “It is a calamity but very expected. No algorithmic stablecoin has ever succeeded and this is no exception.”

He added that the problem with UST is that it’s largely “backed by faith.”

“It’s not fully guaranteed, it’s certainly not fully backed by reserves,” he told CNBC. “It was really just backed by faith in the issuer effectively.”

Terraform Labs did not respond to multiple requests for comment.

visit this link https://www.cnbc.com/2022 .. low-1-peg.html
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 2 months ago '11        #2
Sin  topics gone triple plat - Number 1 spot x51 OP
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@


+23   

 2 months ago '17        #3
justin747  topics gone triple plat - Number 1 spot x5
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sportsbook top 10
Terra doesn’t have cash and other a*sets held in a reserve to back its token. Instead, it uses a complex mix of code — alongside a sister token called luna — to stabilize prices.

Adding to UST holders’ woes, Binance, the largest crypto exchange by market volume, said Tuesday it is temporarily suspending withdrawals of both UST and luna “due to a high volume of pending withdrawal transactions,” citing network congestion.
Literally how every single Crypto coin works including Bitcoin

+26   

 2 months ago '07        #4
Righteous Path  topics gone triple plat - Number 1 spot x8
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it’s a dirty game.
+7   

 2 months ago '11        #5
Sin  topics gone triple plat - Number 1 spot x51 OP
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 justin747 said
Literally how every single Crypto coin works including Bitcoin

Stop it every crypto is a different type of scam

+49   

 2 months ago '16        #6
BathWaterMelody  topics gone triple plat - Number 1 spot x11
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sold my WLUNA and UST at the peak of the bull run

the candlesticks don't lie.
+10   

 2 months ago '15        #7
Lockwind 
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 BathWaterMelody said
sold my WLUNA and UST at the peak of the bull run

the candlesticks don't lie.
When should I sell mine oh wise one
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 2 months ago '07        #8
stogz 
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I've been saying for years....


the only way that crypto is useful, is if the top currencies collapse. If that happens though, earth will have more serious problems than how much bitcoin is worth.

So y'all better hope that crypto stays a scam.
+11   

 2 months ago '06        #9
OJ's_sword 
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 Sin said
Stop it every crypto is a different type of scam

+5   

 2 months ago '15        #10
mwtx  topics gone triple plat - Number 1 spot x2
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I been out of that crypto sh*t something about the last crash just didn’t sit right with me.

That sh*t shoulda been recouperated somewhat
+14   

 2 months ago '06        #11
Sammyboi22 
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 stogz said
I've been saying for years....


the only way that crypto is useful, is if the top currencies collapse. If that happens though, earth will have more serious problems than how much bitcoin is worth.

So y'all better hope that crypto stays a scam.
People say sh*t like it will be useful when countries currencies hit all time lows, etc. not realizing that things like the internet will be hard to come by. You can’t scribble out .00000001 BTC to buy bread if your country is in the same shape as Afghanistan.
+6   

 2 months ago '07        #12
stogz 
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 Sammyboi22 said
People say sh*t like it will be useful when countries currencies hit all time lows, etc. not realizing that things like the internet will be hard to come by. You can’t scribble out .00000001 BTC to buy bread if your country is in the same shape as Afghanistan.
Why would anyone who has infrastructure, have their infrastructure turn to afghanistan? Does that even make sense to you?
+1   

 2 months ago '22        #13
usafveteran  topics gone triple plat - Number 1 spot x3
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+19   

 2 months ago '22        #14
Alog1989 
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Luna doneski.... RIP....

 2 months ago '16        #15
BathWaterMelody  topics gone triple plat - Number 1 spot x11
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 Lockwind said
When should I sell mine oh wise one
sell high, buy low.

buy at support, sell at resistance.

I haven't been following the Terra charts lately, I already cashed out.
+7   

 2 months ago '20        #16
Jimmy2times 
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 stogz said
Why would anyone who has infrastructure, have their infrastructure turn to afghanistan? Does that even make sense to you?
https://allthatsinteresting.com/1960s-afghanistan

That's what Afghanistan used to be. They blame it on the Taliban obviously and will gloss over what America did to turn it to rubble.

But if you look at what's happening in America, to say that it can't collapse or something severe happen to change its course in the next few decades is delusional. And if you factor in the culture and where it's headed, with f*g**try at an all time high and lauded and preached as some sort of virtue, along with the spineless population of men these days thanks to the atrocity that is feminism, the idea of certainty can't even be eliminated.
+5   

 2 months ago '07        #17
stogz 
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 Jimmy2times said
https://allthatsinteresting.com/1960s-afghanistan

That's what Afghanistan used to be. They blame it on the Taliban obviously and will gloss over what America did to turn it to rubble.

But if you look at what's happening in America, to say that it can't collapse or something severe happen to change its course in the next few decades is delusional. And if you factor in the culture and where it's headed, with f*g**try at an all time high and lauded and preached as some sort of virtue, along with the spineless population of men these days thanks to the atrocity that is feminism, the idea of certainty can't even be eliminated.

Again, y'all are talking about some different sh*t that has nothing to do with anything.

The infrastructure is ALREADY here. So a collapse doesn't turn the place into a middle eastern country. A collapse creates haves and have nots. The haves will protect their sh*t.

A collapse would change america to china. No one says china doesn't have infrastructure. No one compares china to Afghanistan.
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 2 months ago '06        #18
Sammyboi22 
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 stogz said
Why would anyone who has infrastructure, have their infrastructure turn to afghanistan? Does that even make sense to you?
If America’s economy tanks like people talk about with crypto, yes our already trash infrastructure would suffer. I worked in the commercial waterworks business. That sh*t is held together with duct tape and bubblegum. Same with telecom, gas, sewer, etc. You think when people stop paying their bills they will still have all their amenities that are provided by people who wouldn’t be getting paid a living wage?
+3   

 2 months ago '21        #19
JabariGarvey 
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Please everyone continue to sell they’re crypto. Please
+3   

 2 months ago '20        #20
Jimmy2times 
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 stogz said
Again, y'all are talking about some different sh*t that has nothing to do with anything.

The infrastructure is ALREADY here. So a collapse doesn't turn the place into a middle eastern country. A collapse creates haves and have nots. The haves will protect their sh*t.

A collapse would change america to china. No one says china doesn't have infrastructure. No one compares china to Afghanistan.
america's culture and values have nothing to do with anything? You know what...



+2   

 2 months ago '05        #21
BurninLz 
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"investors"

Still so early. I'll take the discount, thanks!
+10   

 2 months ago '07        #22
stogz 
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 Sammyboi22 said
If America’s economy tanks like people talk about with crypto, yes our already trash infrastructure would suffer. I worked in the commercial waterworks business. That sh*t is held together with duct tape and bubblegum. Same with telecom, gas, sewer, etc. You think when people stop paying their bills they will still have all their amenities that are provided by people who wouldn’t be getting paid a living wage?
Again... america would turn into china, not Afghanistan.
-2   

 2 months ago '07        #23
DoctorNBA 
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How I let you ma fu*kas talk me into buying this sh*t?
+11   

 2 months ago '15        #24
edub911 
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 DoctorNBA said
How I let you ma fu*kas talk me into buying this sh*t?
+1   

 2 months ago '17        #25
LostTenets  topics gone triple plat - Number 1 spot x47
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I made money off luna but got out because i didn't fully believe in it



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