Historic Terra Collapse: UST De-Pegs, Causing LUNA to Crash 99%

Posted on: May 12, 2022

Collective Shift Weekly Shift Round-Up newsletter

Delivered each Friday, our free Weekly Shift Round-Up covers the week’s major crypto news, price action, and Collective Shift’s latest news.

Welcome back to Collective Shift’s Weekly Crypto Round-Up for Friday, May 13.

The crypto industry’s been rocked as LUNA—a cryptocurrency that was ranked in the top 10 by market cap only a week ago—spectacularly capitulated by 99.99%.

Follow us across our channels to keep updated with the latest news and announcements: TwitterYouTubeFacebookDiscordInstagram and TikTok.

Let’s get into it👇

📆 The Week In Crypto

TerraUSD (UST) de-pegs, sends LUNA crashing

Terra’s stablecoin UST lost its peg over multiple days in one of the biggest moments in cryptocurrency history.

The de-pegging caused LUNA to spiral, caught in a vicious cycle of devaluation. More LUNA is created to restore the UST peg, creating downward price pressure.

Despite Terra’s billion-dollar Bitcoin reserves, LUNA is now -99% and the future of the Terra ecosystem remains unknown.

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Terra Labs founder Do Kwon issued a statement for the community to commit to the ecosystem and change UST-LUNA tokenomics.

Crypto markets dragged down; Bitcoin reaches 10-month lows

Due to the LUNA collapse and poor macroeconomic conditions, broader crypto markets were dragged down.

As of this writing, BTC and ETH are -30% and -35% over the past 7 days, respectively. Bitcoin is now below $30K and ETH is flirting with sub $2K.

Inflation data out, equities continue to struggle

U.S. stocks ended sharply lower on Wednesday as the consumer price index (CPI) continued to increase by 0.3% to 8.3%.

The S&P 500 is down 18% from its record high on Jan. 3. Coinbase also sunk -27% following a first-quarter revenue miss.

Instagram confirms NFT support

Meta confirmed rumours Instagram would support NFTs—announcing a plan to integrate networks and wallets across Ethereum, Solana, Polygon and Flow.

Yellen renews call for stablecoin regulation

US Treasury Secretary Janet Yellen again cited the dangers of stablecoins to financial stability, mentioning UST. She outlined the need for Congress to pass stablecoin regulation before the end of the year.

According to The Block, The SEC is investigating Terraform Labs. The fallout from the UST-LUNA collapse appears significant.

LUNA fall out just beginning?

The fallout from LUNA’s collapse could just be heating up, as multiple venture capital firms could become insolvent.

Crypto hedge fund Arca, which manages $500M of assets, could be the first casualty.

📺 Crypto Market Crash | UST, LUNA, Altcoins | What You Need To Know

Ben jumps on for an emergency crypto update on UST, LUNA, altcoins and more.

📺 State of the Crypto Market: Rough Markets Call for Calm Minds

Nathan (AKA MrCartographer) went live on YouTube, breaking down the state of the market in these uncertain times.

📺 BIGGEST Update On Solana Ecosystem | STEPN & Okay Bears NFTs

In this video, community member @MetaVerse Explorer and Head of Research Matt talk about the recent developments and updates in the Solana ecosystem—from StepN, DeFi and Okay Bears NFTs.

📺 Ultimate Crypto Investor Checklist (Blueprint to Analysing ANY Cryptocurrency)

We share our ultimate crypto investor checklist to analyse any crypto-asset!

📃 LUNA Implodes: Inside This Week’s Free Article

In this week’s free Team Insight, Checkmate shares his opinion on the historic LUNA collapse.

See his post on the Member Platform.

👥 Best From the Collective Shift Community

Preferred stablecoins

Given the collapse of UST, there’s some great discussion on which stablecoins are the ‘safest’ or most used by the community.

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#general: Taking care of your mental health

The Terra collapse has been a big hit for many.

Matt stressed the importance of taking care of each other and your own mental health through this period.

We have mental health resources available—we suggest getting into the Discord, where a lot of the community is coming together.

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🎗 Wrap Up

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