Speculators Hopeful For A Comeback
LUNA, the native Terra blockchain token, showed great potential at the start of the year, defying a general crypto downtrend and even reaching a new all-time high of $119 just over a month ago when other major coins were hitting lows. However, after a dramatic collapse last week, the digital asset lost 99.99% of its value and is currently trading at $0.0001334.
South Korean crypto speculators see this as a buying opportunity and have been aggressively accumulating the coin over the past few days, holding out hope for a rebound.
According to a Reuters report on Thursday, the number of LUNA holders in the Asian country increased by more than 50% in 48 hours on major local exchanges.
“Luna was once a major coin with top-ten market capitalisation, so they will do whatever it takes to revive it,” wrote a hopeful South Korean blogger who reportedly purchased 300,000 LUNA over the weekend. Meanwhile, the buying pressure has had no effect on the crypto asset’s price, which has continued to fall, currently down 23% in the last 24 hours.
Following the collapse of the ecosystem, South Korean developer and Terra co-founder Do Kwon has revealed plans to compensate holders of TerraUSD (UST), the algorithmic stablecoin whose collapse resulted in the LUNA devaluation, as well as plans to rebuild the Terra network. However, his proposals to create a new chain from the old one were met with strong opposition from the community
One of the key drivers of the LUNA devaluation was the excess LUNA minted in response to the UST de-pegging. Hence, many crypto Twitter users and potential investors call for a supply burn instead of a Terra blockchain fork.
Regulators Are Concerned About Continued LUNA Purchases
The South Korean Financial Services Commission (FSC) has issued a warning against LUNA purchases as regulators are concerned about young South Koreans’ tendency to buy the asset despite continued price drops and lack of a clear Terra revival plan.
Things are not looking good for Do Kwon right now, with reports of possible lawsuits against the developer circulating. Meanwhile, Terraform Labs has seen a mass exodus from its legal team, as reported by ZyCrypto on Wednesday.
Several mainstream cryptocurrency exchanges in South Korea are preparing to suspend support for the asset. Bithumb and Upbit, two of South Korea’s largest exchanges, have announced that they will suspend trading support for Luna, starting from May 27 and May 20, respectively. Meanwhile, Coinone has banned deposits in the cryptocurrency ahead of a possible de-listing on May 25.
