While China Cryptocurrency trading has been bannedIts people are still interested in the ups and downs of the cryptocurrency market, especially since many of them have found a workaround and continue to buy and sell all kinds of tokens.
Bitcoin price continued to rally on Monday after a rough weekend, down more than 50% from its peak of $69,000 in November 2021 and close to hitting the $30,000 mark. Like my colleague Jacquelyn Writtenthe problem is happening in parallel with the terraUSD (UST) algorithmic co-stable dependency.
A stablecoin is a digital currency pegged to a more stable reserve asset such as the US dollar or gold and designed to reduce volatility while providing the benefits of a digital currency, such as such as fast transactions. An algorithm-based stablecoin is one that relies on algorithms to maintain a price similar to that of a central bank instead of keeping actual cash in a reserve to back it. USTs are created by “burning” its sister token, Luna, using smart contracts or lines of code written into a blockchain to automatically execute decisions.
Terraform Labs, the organization behind UST, the Luna cryptocurrency, and the Luna Foundation Guard, has emptied its wallet all its bitcoins, about 42,530 bitcoins, or $1.3 billion, on Monday. The UST price dropped to around $0.95.
On the same day, the hashtag #luna skyrocketed to the top ten keywords on Weibo, China’s equivalent of Twitter used by 570 million monthly users and seen by many as the bottleneck for public discussions in the country. . The post tagged #luna has amassed nearly 15 million views as of Monday night.
“LFG [Luna Foundation Guard] announced a $1.5 billion loan to rejuvenate UST, but in my view, Luna has seen its day. Even if it is saved, it can go on to have Parkinson’s disease, shaking for the rest of its life. No one dares to join after such a crisis of trust,” Written a user with over 200,000 followers on Weibo. Others have shared screenshots of their losses due to the Luna crash, where the price dropped by more than 50% within 24 hours.
While it’s hard to measure how many people in China are trading crypto, almost 10% of web traffic to OKX, which consistently tops 15 exchanges worldwide, comes from China, according to web analytics company The same, similar (h/t Wu Blockchain).