Terra blockchain was halted on Thursday after its cryptocurrency Terra Luna tanked 99 percent. The stablcoin token fell sharply from a high of $118 last month, to $0.09 on Thursday.
Meanwhile, Terraform Labs raised the circulating supply of Luna tokens to over 6.5 trillion, a steep jump from 386 million barely a few days ago.
Later, Terraform Labs stated that it has halted the Terra blockchain and is working to “come up with a plan to reconstitute it”.
Meanwhile, Terra (UST) stated in a tweet that validators are applying a patch to disable further delegations, and they will coordinate to restart the network in a few minutes.
Coinbase suffered major outage especially with cryptocurrency Terra Luna on Thursday.
“We are aware that some customers are having issues trading and accessing accounts on Coinbase and Coinbase Pro. Your funds are safe, and we are actively working on the issue. We'll provide an update here soon,” said Coinbase.
Later, the company said the situation was being resolved.
Global crypto market cap lost over $275 billion within 24 hours on Thursday and Bitcoin dropped to nearly $27,000, a level it witnessed in December 2020.
Investors ought to be careful
As Luna lost 99 percent of its value, score of crypto investors, especially those who invested into the stablecoin are distraught and shocked.
It is, therefore, advised to invest after carrying out proper research and avoid risking to invest the entire crypto portfolio in one or two crypto tokens.
Regardless of the strong fundamentals or the lack of them, the investors are prone to facing the wrath of sharp decline in cryptocurrency prices.
Last year in November, Squid Game cryptocurrency — after rising by 3,000 percent in three days — it crashed to zero after the token developers did the rug pull. This was seen as one of the major scams in the crypto world.
Although, the case with Luna is infinitely different. CoinMarketCap, in a disclaimer, warns investors to move with caution: “Due to the de-pegging of UST, LUNA is experiencing extreme volatility. Please proceed with caution. The Terra blockchain was also halted.”
“TerraUSD has come under pressure since the weekend. This is a significant test of algorithmic stablecoin’s ability. Terra’s de-pegging and its future will be closely watched. But the important thing is: Your actions should follow a sound assessment. Don’t buy because others are. Don’t sell because others are. Do your own research,” Ashish Singhal, Co-founder and CEO of CoinSwitchKuber.
"Understand the nature of each asset. Markets go up and down. Every time the S&P 500 has risen 20% or more for over a year, it has corrected some of those gains. When it comes to investment, no amount of information is too much. Stay informed, stay safe," he adds.
Also, Cross Tower India CEO Vikas Ahuja says there are numerous reasons responsible for the current decline in crypto market. “Several factors account for the ongoing crypto market decline, including inflation and recession fears. Also, the global crypto market has responded to higher yields on US Treasury securities and the prospect of aggressive policy tightening to address inflation," says Mr Ahuja.