AFTER enjoying strong gains in 2021, the crypto Luna plunged below $1 in early May, spelling its demise and the downfall of a linked crypto.

Now in the wake of Luna's collapse, the coin's founder is planning to rebrand and relaunch the coin with the backing of most investors.

The crypto market slumped in May, and most major coins have suffered severe losses.

Luna's sudden price collapse came as a surprise because it's a stablecoin.

Stablecoins are backed by other assets in an attempt to limit volatility.

Luna saw its first major spike last summer and climbed through the fall and winter.


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The coin's price peaked at $116 in early April, but it's sitting at $0.0001479 as of May 26 and down 90% in the past 24 hours, according to CoinMarketCap.

Any cryptocurrency investor must be aware that it's not a guaranteed way to make money.

Their values are highly volatile and can make large swings with no notice, meaning you may lose all the cash you put in.

That's why it's important to not invest more than you can afford or into anything you don't understand.

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There's also scant regulation for cryptocurrency firms, meaning you're without protection if and when things go wrong.

What is Luna?

Luna, also known as Terra, is one of two major coins created by Terra Labs, a South Korean company.

The Luna Foundation Guard, the organization that supports Luna's price, has nearly 30,000 bitcoins in reserve to back the stablecoin, according to Bitcoinist.

The other coin from Terra Labs, TerraUSD or UST, was linked to Luna.

According to Coindesk, the price of UST is "algorithmically stabilized" through smart contracts involving its sister coin.

UST was pegged at $1 through a process of destroying Luna coins and minting UST.

Theoretically, this process was supposed to make Luna more valuable as it becomes more scarce, and keep the price of UST from moving above its $1 benchmark.

A drop in UST price created an unstable market for the stablecoin, however.

"The slump in the Luna is tied to the selloff that ensued after millions of tokens were issued to restore UST’s 1:1 peg," markets editor Luzi Ann Javier told The Sun.

"Stablecoins were supposed to shield investors from the gyrations in the crypto market with its peg to the dollar.

"When that peg was broken, it shook investor confidence not just in stablecoins but across decentralized finance."

The fall of UST and the rise of Terra 2.0

As a result of Luna's price collapse, UST similarly bottomed out.

The coin suffered multiple shocks after Luna cratered, and UST is now at $0.07709 less than three weeks after it was at $1.

After the Terra ecosystem crumbled, Terra founder Do Kwon put the ultimate fate of Luna and UST in the hands of investors.

On May 25, Terra held a vote to revive the coins, and 65% of investors approved a plan to relaunch Luna, but scrap UST entirely.

As a result, a new Terra blockchain will be created, branded as Luna, while the coin formerly known as Luna will be called Luna Classic.

Terra Labs plans to distribute new Luna coins to existing investors, with 45% of new coins directed at pre-crash Luna and UST holders.

Another 25% of newly minted coins will be given to investors who entered the Terra ecosystem after the collapse.

The remaining 30% will be distributed around the Terra community.

Many trading platforms including FTX and Bitfinex announced that they will support Luna 2.0.

Luna price prediction

Most cryptocurrency price predictors have yet to react fully to the news of Luna's collapse and rebirth.

Some forecasts on Luna's price are skewed because of this.

With that in mind, Wallet Investor predicts that Luna will regain its losses and hit new highs before the end of the year., on the other hand, expects Luna's price to average $0.00035 next year, and $0.00054 in 2024.

These price predictions are never guaranteed though, so you should always do further research and proper analysis.

We've also revealed price predictions for other cryptocurrencies including Bitcoin, Dogecoin, Shiba Inu, dYdX, and EO.

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The Sun also broke down the price of ApeCoin.

And read how Elon Musk's plan to buy Twitter impacted the price of Dogecoin.

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