Just Before Luna and Terra Plummeted, 'Whale' Investors Cashed Out

[Image source=Yonhap News]

[Asia Economy Reporter Song Seung-seop] An analysis has emerged that major investors known as "whales" cleared their holdings in advance just before the virtual currencies Luna and Terra plummeted.

According to major foreign media on the 2nd (local time), cryptocurrency financial company Jump Crypto analyzed and disclosed blockchain transaction data. The data revealed signs that several large investors liquidated their UST holdings. Some whales began withdrawing funds from the Anchor Protocol within the Terra ecosystem starting on the 7th of last month, right after the UST price first fell below the peg of 1 dollar. However, small investors, or "ants," increased their UST holdings until the 9th.

In the crash report released that day, Crypto analyzed that the whales' exit dealt a decisive blow to the sharp drop in UST prices. Nevertheless, it viewed the connection between specific cryptocurrency wallets that triggered the crash and professional trading firms as minimal. This unidentified cryptocurrency wallet is evaluated to have triggered the crash by selling $85 million (105.6 billion KRW) worth of UST on the 7th of last month.

Terra and Luna are cryptocurrencies with a unique algorithm. When the UST price falls below 1 dollar, an arbitrage algorithm automatically restores it to 1 dollar. However, as distrust in the Terra system grew, the prices of UST and Luna fell simultaneously.