Without a question, Terra was at the epicentre of the 2022 crypto market collapse. The project was one of the most prosperous before to the catastrophe, reaching a record high of $119.18 in April. But the soaring climb paved the ground for a legendary fall. The ensuing death spiral sent investors and users into a frenzy. Many people’s lives were completely destroyed, losing all they had saved up for. Since then, the team has created a new Terra Luna token (LUNA) and renamed the existing one Terra Luna Classic (LUNC).
After dramatic collapse earlier this year, the Terra blockchain’s cryptocurrency LUNA was regenerated. On Friday, the price of LUNA tripled, trading close to its all-time high achieved in early June when the token was issued.
According to data from cryptocurrency price tracker CoinGecko, the token’s price surged from less than $2 to roughly $7. At the time of publication, LUNA was trading at about $6, up more than 212% over the previous 24 hours on significantly greater trading activity.
The native coin of the second iteration of the Terra blockchain, which was revived following the token’s collapse in May, which resulted in the loss of $60 billion in value, is called LUNA. Investigations of fraud against Terraform Labs, the company that developed the blockchain, and its founder Do Kwon followed the implosion. The Luna Classic (LUNC) currency and its stablecoin USTC are hosted on the old blockchain, now known as its Classic version.
Terra’s LUNC surprising surge
Risky investments like cryptocurrencies seem to be broadly rising on Friday in a relief rally as several economic indicators point to a slowing global economy and traders consider the possibility that the Federal Reserve may scale back rate hikes earlier than anticipated or even cut interest rates next year.
Traders became enthusiastic about a new burn program that would reduce the token’s inflated supply, which has caused LUNC to rise as well. Since then, the surge has slightly stagnated, as the coin has dropped 17% in the last day.
Crypto market observers are perplexed by LUNA’s erratic price movement because there hasn’t been any network-specific news or development that would spark excitement among retail traders.
Data from the social asset analytics platform for digital assets LunarCrush indicates a recent surge in social media mentions and engagements is indicative of a retail speculative frenzy.
The new blockchain for the currency has so far had trouble drawing investors into its ecosystem. According to DeFi data tracker DeFiLlama, the network’s total value locked (TVL), a key metric in decentralised finance (DeFi) that gauges how much value a protocol can amass from investors, stood at a pitiful $51 million at press time. In contrast, the “old” Terra Classic blockchain’s TVL reached more than $20 billion in May before its collapse.