New Luna Drops to $6 After Rollercoaster Ride... Trading Volume Also Declines

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] Terraform Labs' new cryptocurrency Luna (Luna 2), which had been experiencing sharp fluctuations, is trading in the $6 range.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 8:26 a.m. on the 5th, Luna's price was $6.36 (approximately 7,963 KRW), down 2.80% from the previous day.

Unlike the initial period of sharp fluctuations after listing, Luna's price has remained in the $6 range since the 2nd of this month. The price at 6 p.m. on the 28th of last month, when CoinMarketCap began tracking, was $17.80 (approximately 22,286 KRW), and it rose to $19.53 but then dropped to $4.05 around 11:40 p.m. the same day. On the 31st of last month, it rose to $11.46 but then declined again to the $6 range. Compared to the initial tracked price, it has fallen by more than 60%.

The decline in Luna's price appears to be due to market distrust toward Terraform Labs. Previously, when the price of TerraUSD (UST), a stablecoin designed to be pegged to $1, plummeted, the price of the original coin Luna Classic also crashed. Following this crash, Terraform Labs launched the blockchain ecosystem "Terra 2.0" and issued Luna amid the ongoing market distrust. Terraform Labs even posted the phrase "Terra 2.0 has arrived" on its homepage.

However, the response was cold. Vijay Ayyar, Vice President of the cryptocurrency exchange Luno, said, "There has been a significant loss of trust in the entire Terra project," adding, "There are already many well-established platforms with active developers. I don't see why Terra should succeed here." Additionally, Billy Markus, co-founder of Dogecoin, criticized, saying, "They should not create new investors and should leave the industry forever."

Meanwhile, Luna's trading volume has also shrunk since the beginning of this month. From $281.6 million (approximately 352.6 billion KRW) on the 28th of last month, it surged 5.64 times to $1.58868 billion (approximately 1.989 trillion KRW) on the 31st. This increase in trading volume appears to be linked to Luna's price rising sharply from $6.55 to $11.46 on the 31st. However, trading volume has since decreased, dropping to $946.79 million on the 1st and $327.4 million on the 3rd.