Crypto Winter is happening !
The last week has been a blood bath for crypto market. First we have the Terra Luna incident causing the crypto market to go below $30k and in some exchange even reach around $25K. The impact cannot be taken lightly because Luna was one of the top 10 cryptocurrency market in terms of market cap before the incident.
What happen with Luna ?
First we need to know the utility of Luna. Luna was correlated with a stablecoin named UST. They were interchangeable with an algorithm. So if you have luna , you can exchange it for UST and you can exchange UST for Luna ( $1 worth of Luna for every UST ) and keeping it stable using burn mechanism. The algorithm seems to be good because traders can go back and forth from UST to Luna and Luna to UST to keep the UST Stable. Problem arises when whales started to sell their UST and creating more Luna faster than they can burn. It will cause a death spiral where people keep selling UST hence creating more and more Luna causing both Luna and UST to dump faster.
Luna went almost to 0 and rebounded to around $0.000015 when people are buying the deeep. Thats 99% of the $80 value before the depegging. UST went to around $0.1 per UST. Very abysmal for a stable coin.
My thoughts on Luna
I think the Luna incident is a lesson that we all must do our research before investing in crypto and just put the money that will not affect our finance to invest. Crypto is a very volatile and risky investment with great return in the long run. I have read that some people lose their live savings and some took their life due to this incident.
If you are affected by this incident please keep your head clear, you will be able to make it back someday. It is not the end. Make this experience to diverse your portfolio with my allocation : 50% savings, 25% low- medium risk and 25% medium to high risk ( This is not financial advice , just my risk appetite ). Don't try to get rich quick. There are some great stories about people making 10x - 1000x by investing in crypto, however they are just small fractions of the story. More and more people are losing their money because of greed. Please stay level headed.
As for Luna itself, i believe they are voting to fork to Luna 2.0. I believe this is the easiest way out but sounds like a scam, just my opinion. ( I am not sure if I can trust them ). The best solution is to save the current Luna ( which will be called Luna Classic ) however it will take a lot of money to burn 6.5 trillion or more token. Let's hope for the best solution for The Terra foundation and let's hope they are not trying to cheat luna token holder twice.
As of this week, the prices of bitcoins and friends are at:
Bitcoin ( BTC ) - $28,956.00 / IDR 427,830,000.00
Ethereum ( ETH ) - $1,937.00 / IDR 28,589,000,00
Here are some of the prices of crypto assets in my portfolio:
Cardano ( ADA ) - IDR 7,576.00
Polkadot ( DOT ) - IDR 140,800.00
Chainlink ( LINK ) - IDR 101,847.00
Stellar ( XLM ) - IDR 1,880.00
Tezos ( XTZ ) - IDR 24,748.00
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