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LUNA might soon vanish into oblivion if it fails to break from its current market slump
Binance has finally resumed withdrawals of the LUNA and UST after the two cryptocurrencies crashed on Tuesday as the broader crypto market fell to the ground. Investors and crypto whales are abandoning their cryptocurrency investments since the day the crypto market stopped supporting its investors. As the crypto community is trying to decipher the actual reason behind the declining value of TerraUSD and how it is affecting the LUNA cryptocurrency, the Terra Founder, Do Kwon has strategized to utilize Bitcoin in order to support LUNA. But experts and critics predict that it might not be the right step. Meanwhile, the cryptocurrency exchange giant, Binance, had suspended the two tokens briefly due to the network slowness and congestion. Investors complained that they found their LUNA and UST investments frozen, with no orders going through.
TerraUSD’s ongoing de-pegging catastrophe caused Binance to take this drastic step. The exchange blocked all withdrawals from its platform for about six hours, citing a high volume of pending withdrawal transactions. The Binance exchange stated that the high volume of UST transactions is mainly due to the network slowness and congestion. But critics are questioning Binance’s step since it has advanced exactly the opposite values of what the crypto stands for. But amid the dwindling market conditions, Binance probably took the first step to save the cryptos listed on its platform and also help investors using the exchange.
Crypto exchanges are suffering amid plummeting values of the digital assets
Several factors like rising global inflation, geopolitical crises, a shift in the US monetary policy, and others continue to adversely affect the crypto market. But these factors also directly affect the crypto exchanges. The consistent reduction of daily trading volumes and transactions has led crypto exchange leaders to believe that the worst is yet to come, which might actually be true. Nevertheless, as always suggested by market experts, investors should always be careful while exploring these untrodden domains. The current condition of the market is quite shocking; hence, it is best suggested to consult financial experts and consultants before further investing in cryptocurrencies or any other form of a digital asset.
Will cryptocurrency exchanges really abandon LUNA?
Well, almost all cryptocurrencies are going through a difficult phase, but that inherently does not really signify those crypto exchanges will drop LUNA. While the Terra ecosystem and its developers are trying to find a permanent solution for the declining prices of the crypto, numerous other cryptocurrency leaders have shown their support to the Terra Founder.
This dwindling condition of Terra is also affecting Bitcoin and other cryptocurrencies. According to reports, Kwon plans to buy US$10 billion worth of Bitcoin with the help of a non-profit foundation named Luna Foundation Guard. These funds will be aimed to provide support in case there is a dramatic fall in the value of Terra. The idea is that BTC would act as ‘reserve currency’ for Terra, in a similar way central banks hold large quantities of dollars and other fiat currencies in their foreign exchange reserves. The problem is, owing to the current market situation of Bitcoin, it might not be a safe plan to re-establish the value of a cryptocurrency and a stable coin. This might not only tumble the Terra ecosystem but might also cause challenges for Bitcoin and eventually the entire crypto market.
Terra was one of the top cryptocurrencies that dropped significantly overnight. The volatility of the crypto market is scaring away investors. Some of them are opting for traditional and centralized assets, whereas, others are opting for NFTs. Well, it kind of seems like the crypto market might soon vanish into oblivion if the transaction volume and token prices do not stabilize soon enough.
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