We have all seen the ads all over the Internet. “Buy Crypto With Credit or Debit Card With 0% Fees!” Become an instant crypto millionaire – so goes the story.
Get rich quick schemes have been around since the dawn of time. Are cryptocurrencies just the latest instantiation of the “Tulip Bulb” scam of the 1600s in Holland? For LUNA coin holders, the answer is “yes!”
Here is one story before the crash of LUNA. Is LUNA coin a good investment? It could be. This year, the LUNA coin has already been acting exactly bullishly, as well as analysts anticipate that this trend would continue. When predicting Terra’s long-term price, fundamental analysis becomes critical. The native token LUNA has some benefits inside the industry. Its self-sufficiency makes it ideal for the digital world. See predictions below and learn more here.
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But the actual LUNA result?
LUNA crypto holders have undoubtedly been having a terrible week. The coin is seeing one of the most spectacular plunges in years, losing nearly all of its value. Meanwhile, developers have been scrambling to regain control over what remains of the project. A series of emergency measures hope to do just that.
Then the announcement. Please note Binance Suspends Trading LUNA, Price Zero, Down 100%. After earlier delisting Terra (LUNA) from its perpetual futures trading pairs, Binance exchange has suspended all spot LUNA trading. Earlier today, other crypto exchanges froze spot trading of LUNA against Bitcoin, Tether (USDT), or fiat currency, some stating it was to protect traders. See the spectacular price drop in the chart below.
Terra falling victim to such a plunge is a big surprise, given the size of the network. LUNA consistently ranks among the 10-largest crypto projects in the world by market capitalization. Its sibling token, the UST stablecoin, reliably ranks among the top 15. These projects, at their height, shared a market capitalization of over $40 billion. Learn more here.
Cryptocurrencies are risky enough on their own. But the risk extends to crypto exchanges as well. Please note this Coinbase (a major crypto exchange) warning below:
Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings, and such customers could be treated as our general unsecured creditors. This may result in customers finding our custodial services riskier and less attractive, and any failure to increase our customer base, discontinuation, or reduction in use of our platform and products by existing customers as a result could adversely impact our business, operating results, and financial condition.
Here is a video that gives some more background on the LUNA crash. It also suggests a rumor that Blackrock and Citadel were behind a plan to target the cryptocurrency in a scheme to take it down for-profit – even suggesting that they did this at the behest of US Treasury Secretary Janet Yellen. It should be noted that Yellen may have a conflict of interest in support of the government’s proposed new cryptocurrency – Fedcoin.
Yellen said on Thursday that Terra’s spectacular tumble shows the dangers of tokens that purport to be pegged to the US dollar. She called for new regulations and added that Treasury was working on a report about the issue.
Is Bitcoin Next?
No doubt that this LUNA crash has shaken the confidence in all cryptocurrencies – the entire complex has been on the back foot in terms of prices. However, the technical issues are somewhat specific to LUNA. The future of cryptocurrencies?
Yes, blockchain technology is good. Yes, eventually, society will become a cashless society. This is not the question.
Cryptocurrency enthusiasts will fight to the bitter end, though many will make big money in the cryptocurrency mother of all Tulip Bubbles. Fundamentally, money is the power of the state. It has given power to politicians for millennia to manipulate the economy and manage society. In modern times the power to print money can buy votes – scamming the population via currency debasement. Governments will never give the power of money to individuals – as unfortunate as this may be.
Governments and central banks today allow the current cryptocurrency market as a prototyping mechanism to eventually implement the government-approved cryptocurrency (e.g., Fedcoin) – the rest will be banned from use and remain on the edges of the economy. As soon as these cryptocurrencies get into the mainstream as a significant payment mechanism, the governmental hammer of regulations will come.
Like all money in history, cryptocurrencies’ final value will be zero (aside from any numismatic value).
By Tom Williams at Right Wire Report
CryptoWallet.com Images, CC BY 2.0 <https://creativecommons.org/licenses/by/2.0>, via Wikimedia Commons