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Epic Pennant on BTC Chart


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2 hours ago, VanHasen said:

I wouldnt touch it until the UST peg is fully recovered and stable (if at all).

If luna is still below 1 dollar by then it could be worth a shot

This is good advice. If you're not in Terra, don't touch it until UST stabilizes, if that's even possible at this point.

If UST manages to regain the peg it will do so by absolutely driving LUNA into the ground. That's how the system works - they minted like 15 billion LUNA yesterday trying to restore the peg. The only thing they can do is keep minting more until either UST comes back to peg or LUNA becomes so worthless it can't secure the network and Terra becomes the new Iron Finance.

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15 minutes ago, Eric123 said:

Think you're right and there are too many bargains on good coins to be messing around with a dead cat bounce play.

Aaaaand it's gone ... $0.005 on Binance and no bids what so ever. De-listing next?

I'd say you dodged a bullet there.

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6 hours ago, VanHasen said:

Its crippling

While the SEC sued Ripple to protect the old slow system(s) they and everyone else watched a stablecoin and its collateral luna grow out of nowhere right into the top 10 

A stablecoin which is backed by btc, I mean seriously? WTF

The systemic risk was written on the wall since the beginning and no one ever cared to stop guys like kwon - who has put the whole market in this kind of a damage loop right now - before his scam became too big. Because a lot of people made money on it. 

It has become a multi billion dollar fraud and now it blows off --  Luna needs to sell BTC which increases the sell preassure on the whole market and drives the price further down to a point where it could trigger large holders like microstrategy to liquidate - possibly driving the price down to 10k?! (wasnt Luna one of the biggest BTC holders recently due to UST growing that fast?)

This is why this market needs regulation, exactly this situation is what the SEC should have protected us from. They didnt - but they will use it as excuse to bolster their way of regulating by enforcement and they will keep on hunting the utility projects to protect their friends at JPM, BTC, ETH, Wallstreet while scams are free to thrive!

UST isn't backed by BTC. DAI is; you've had years to call them out on it but haven't because it's easier to take cheap shots at a project after it's failed.

I didn't see the Bitcoin maxis complaining when Terra was buying billions of dollars worth of BTC.

What's the SEC going to protect people from when what they want is unregistered securities? Registered crypto would just be a mirror of the stock market. If you don't want the risk/reward of an unregulated market, stick to stonks.

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4 minutes ago, brianwalden said:

UST isn't backed by BTC. DAI is

sry i may have translation issues on this topic but it got collaterised first by luna, then with btc - maybe "backed" isnt the right word for it - but however....

https://invezz.com/news/2022/05/11/what-happened-ust-and-was-it-an-attack/

"The Peg

UST is the stablecoin that is collateralised by Luna. Selling 1 UST will always enable you to mint 1 Luna token, and vice-versa. In such a way, the popularity of UST fuels Luna, which explains Luna’s meteoric price rise as UST mushroomed to an $18 billion market cap and a top 10 cryptocurrency. Hit “Play Timeline” on the below graph to see a graphical demonstration of this relationship from March 2021 to present.

Luna, however, is not collateralised by anything. Therefore, the question doubters always asked was the following:

What happens if there is a large quantity of UST sold?

In that scenario, every dollar of UST sold mints a new Luna token, which makes the price of Luna fall heavily. Which is how it’s meant to work. But if the selling pressure of UST is so much that Luna can’t absorb the volume, what happens then? Well, the peg has to give way. 99 cents. 98 cents. 97 cents. Then, people panic. They sell more UST. Which means the peg dips further. And on and on we go. It’s a run on the bank.

The Fatal Flaw

Earlier this year, Terra founder Do Kwon announced that Bitcoin would be used as collateral, so that in such scenarios as described above, Terra could intervene and sell these Bitcoin reserves to buy UST, hence propping the price back up until the $1 was restored. This was outlined to kick in when the peg dropped to 98 cents.

This is key, and it was a massive oversight by Terra. It doesn’t make much sense to collateralise an asset (UST) with a highly volatile asset (BTC). It makes even less sense when those two assets are correlated to each other."

18 minutes ago, brianwalden said:

you've had years to call them out on it but haven't because it's easier to take cheap shots at a project after it's failed.

no offense here, friend - but it is by no means my responsibility to call them out as i`ve not even known what Luna or UST is until it started this shit show. I`ve heard of it, sure, as it had a meteoric rise recently but its not on my duty to do deep research on every coin pumping from nowhere right into the top 10.

Not meant to take cheap shots here, but sry dude, this is pure negligence and THIS is why regulators have their duty to do the research and step in before its too big (late)

 

"Think about this – the stress test of the ecosystem was always going to come on a red day. So, on a day when Bitcoin is crashing, the plan was to sell this crashing Bitcoin to assuage the selling of UST and prop up the peg. Terra (via the LFG, who were in charge of the collateral) bought 37,000 bitcoins last Thursday, bringing their collateral kitty up to $3.5 billion. This means less than 20% of UST’s $18 billion market cap was collateralised."

However, given the Bitcoin holdings and plan were all public, the market knew what would happen. Once UST started losing its peg, it meant Terra would sell their Bitcoin to buy UST and restore the peg. With this massive sell order imminently hitting the market – remember, Terra is in the top 10 holders of Bitcoin – the price of Bitcoin then starts falling in anticipation of the large sales to buy back UST

This obviously lowers the value of Terra’s collateral package, as Bitcoin tanks itself. Therefore, Terra’s ability to prop up the peg is restrained, because the market value of their collateral is falling. Their $3.5 billion and 20% collaterisation ratio soon became $2.6 billion and 14% collateral. This, of course, causes further fear and panic, further selling, and further fear. And on we go. That’s how you get the peg collapsing, contagion and mass meltdown."

45 minutes ago, brianwalden said:

I didn't see the Bitcoin maxis complaining when Terra was buying billions of dollars worth of BTC.

well I´m no BTC maxi - and if i would`ve known that Terra is buying BTC worth billions of dollars to use it as collateral for their stablecoin I certainly would`ve complained, as everyone should have

But again, as casual investor I`m not responsibel to do a deep dive into what seemed to be another hype coin entering the top 10 per market cap

36 minutes ago, brianwalden said:

What's the SEC going to protect people from when what they want is unregistered securities? Registered crypto would just be a mirror of the stock market. If you don't want the risk/reward of an unregulated market, stick to stonks.

as the SEC reportedly focussing on stable coins and exchanges, IMO, it is their responsibility to crack down on such high systemic risk coins before shit hits the fan

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1 hour ago, brianwalden said:

If UST manages to regain the peg it will do so by absolutely driving LUNA into the ground

Really cant imagine this happening now just intuitively. UST is below 0.5 and LUNA fights for 1c, its market cap is 30M

Is it time to announce fiasco?

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I wonder whether Terra buying Bitcoin opened up the de-pegging as a consequence, or whether Terra bought Bitcoin to avoid de-pegging because something else was happening (e.g. SEC lawsuit) but it was too late/wasn't enough/not thought through. 

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Posted (edited)

According to this guy, bitcoin plays a very important part. I couldn't understand it 100%. This thread is worth reading and welcome the insights from folks here.

Edited by lizshadehdg
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21 minutes ago, xrp-nuke said:

Really cant imagine this happening now just intuitively. UST is below 0.5 and LUNA fights for 1c, its market cap is 30M

Is it time to announce fiasco?

Yeah, I don't really see a way to recover from this.

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13 minutes ago, Ripley said:

I wonder whether Terra buying Bitcoin opened up the de-pegging as a consequence, or whether Terra bought Bitcoin to avoid de-pegging because something else was happening (e.g. SEC lawsuit) but it was too late/wasn't enough/not thought through. 

Yeah their thinking was that the BTC reserves would be like a floodgate. In times of dropping UST demand people could trade it for BTC instead of burning it to mint LUNA, which only further depresses the price, thereby relieving the pressure on the system.

Terra thought they had figured out the formula for how to make an algorithmic stablecoin work despite the failures of all the ones that came before them. They were clearly wrong.

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Posted (edited)

So are they now halting terra chain to stop inflating luna and prop up its price while still selling their btc holdings into UST? 

In my view they intentionally keep on harming the whole market in trying to safe their failed experiment and pump their luna bags. 

Wouldnt simply letting it die do much less harm to the market? 

 

Edited by VanHasen
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Posted (edited)
29 minutes ago, VanHasen said:

So are they now halting terra chain to stop inflating luna and prop up its price while still selling their btc holdings into UST? 

In my view they intentionally keep on harming the whole market in trying to safe their failed experiment and pump their luna bags. 

Wouldnt simply letting it die do much less harm to the market? 

 

Terra is a proof of stake network. There's still value left on the chain in the various apps running on top of it. The price of LUNA was so low that it made the network vulnerable to attack by a malicious validator. This wasn't a financial decision, but a security one.

The market doesn't care about Terra, why should Terra care about the market? Its responsibility is toward the account holders with assets on the chain.

Edited by brianwalden
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10 minutes ago, brianwalden said:

The market doesn't care about Terra

Looking at the bloodbath it has caused i would argue the market cares a lot, no? 

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Terra's trouble is just getting started. People lost money, so while retail may shrug rekt, the regulators won't let go. In a few week/months, we'll likely see U.S. regulators go after Terra much harder. The fact that it is in S. Korea won't matter. The U.S. has extensive cooperation arrangements with major economies.

I hope there were no CEXs or CeFIs that promoted 20% APY by staking Luna. If they did, they are going to be sued as responsible for lost funds against unregistered securities. 

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Today was a high volume day for Bitcoin with a big move down which recovered somewhat.  Was this Capitulation?? Highest volume since may 19, 2021, (although the volume that day was twice today's volume)

5 11 2022.png

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