Disclaimer: The datasets shared in the following article have been compiled from a set of online resources and do not reflect AMBCrypto’s own research on the subject.
Recently, the price of Terra Luna (LUNA) witnessed record highs in the last seven days. LUNA was trading at $1.42 in the middle of April but the token later witnessed a big drop in its value.
At press time, LUNA was trading for a price of $0.93. Despite this growth, the overall outlook towards LUNA remains bearish, which insinuates that this crypto may soon face a big drop in the market.
The project’s founder Do Kwon is currently under arrest after being caught in Montenegro. As per a latest report by Forkast, a South Korean court has approved local prosecutors’ request to freeze assets and properties worth $176 million belonging to Do Kwon.
In fact, another news report published on 30 March claimed that the United States may have gained an advantage in a race with South Korea to extradite Terraform Labs CEO Kwon Do-hyung from Montenegro on fraud charges related to the collapse of the $40 billion Terra-Luna cryptocurrency project in May last year.
Also, the Seoul Southern District Prosecutor’s Office seized approximately $160 million in assets from eight individuals linked to the collapse of Terraform Labs.
Read Price Prediction for Terra (LUNA) 2023-24
Terra Luna (LUNA) was trading at $0.93 at press time, its press time market cap flashing a figure of $243 million. Its future remains bleak as per most market experts.
It has now been nearly ten months since the Terra Luna project experienced a catastrophic collapse in May 2022. Later, major crypto exchange FTX collapsed in November 2022 and recently, the crypto-friendly Silicon Valley Bank (SVB) also collapsed.
Stablecoins, such as UST, were created to protect investors from the extreme price volatility of popular cryptocurrencies, such as Bitcoin (BTC).
As fiat currency is pegged to reserves such as gold, a stablecoin is pegged to either a fiat currency (e.g. USD) or a supporting cryptocurrency. In this case, TerraUSD was pegged to Luna. But herein lies the conflict. A cryptocurrency isn’t equivalent to gold reserves. As LUNA prices got destabilized, it had an impact on UST prices too, and the entire stablecoin system collapsed in the second quarter of 2022.
The stablecoin project was aimed at complementing the price stability and wide adoption of fiat currencies with the decentralized model of cryptocurrency.
Even those who are only vaguely familiar with the cryptocurrency industry know of the apocalyptic collapse of LUNA and UST in May 2022. This collapse was crucial in instigating the cryptocurrency crisis thereafter.
LUNA was one of the market’s top performers once, with the altcoin once among the top 10 cryptocurrencies by market value towards the end of 2021.
A Bloomberg report from May 2022 sheds light on the further developments that transpired. It was in early May 2022 that the Terra system collapsed as large investors began selling their tokens. The move caused a huge drop in the price of the coins. While the price of UST fell to $0.10, LUNA’s price fell to almost zilch.
The cryptocurrency market lost around $45 billion within a week in the ensuing bloodbath, leading to a global crash in the market. The leadership of the Terra system hoped to buy Bitcoin reserves to buy more UST and LUNA coins so that their prices can be stabilized, but the plan didn’t work.
Thousands of investors across the globe lost significant amounts due to the mishap. In the immediate aftermath, the Korean National Tax Service imposed $78.4 million in corporate and income tax on Do Kwon and Terraform Labs after a Terra investor filed a police complaint against the co-founder.
In fact, an affected investor even broke into Kwon’s house in South Korea. His wife then sought security from the police.
In July 2022, News1 Korea reported that South Korean prosecutors raided 15 firms, including seven cryptocurrency exchanges in relation to the investigation around the Terraform collapse. More than 100 people who filed complaints with the prosecutors’ office reportedly had losses totaling roughly $8 million.
Many from the industry had been warning the cryptocurrency community about the upcoming doom. Kevin Zhou, CEO of Galois Capital, was one such individual. He said that the result was inevitable as the “mechanism was flawed, and it didn’t play out as expected” However, most people didn’t pay any heed.
In 2022, Bloomberg reported that a new version of LUNA was launched following a hard fork, with the new LUNA coin no longer associated with the devalued UST coin. The older currency is called Luna Classic (LUNC) and the newer one is called Luna 2.0 (LUNA). Though the older cryptocurrency has not been entirely replaced, its community might slowly dissolve as more and more users move to LUNA 2.0.
The new initiative included an AirDrop of new LUNA tokens to those who held Luna Classic (LUNC) and UST tokens and suffered. A significant portion of the minted currency is to be reserved for development and mining operations. Currently, there is a supply of 1 billion LUNA tokens.
The collapse of the twin coins proved to be a harbinger of increased government regulations, if not downright opposition, in the cryptocurrency industry. The anonymous model of the industry, much touted to be the foundation of the decentralized cryptocurrency market, was once embraced by all. However, the moment people lost their investments, they rushed to government authorities for redressal.
This is when government financial authorities found the opportunity to push for implementing rules and regulations in the crypto industry to tackle price volatility, money laundering, etc.
The entry of corporate institutions with government oversight into the industry had already set the tone for what was to come. But this collapse furthered this trend. Now, cryptocurrency entities, whether large or small, will likely be overseen by central banks across the globe. In such scenarios, it will be critical to observe how the industry manages to uphold its anonymous and decentralized nature.
Why these projections matter
The future of LUNA is a very critical matter for the entire cryptocurrency industry. Launched as a part of the regeneration strategy, its performance so far has not exactly been celebratory.
Transactions on the Terra 2.0 blockchain are validated through the proof-of-stake (PoS) consensus mechanism. The network has 130 validators working at a given point of time. As a PoS platform, the power of the validator is linked to the number of tokens staked.
How LUNA trades will determine the course of not only this particular cryptocurrency, but a number of stablecoins in the market. If it succeeds in gaining the trust of investors, the venture will go a long way in furthering the cause of the asset class of stablecoins.
In this article, we will lay down the key performance metrics of LUNA such as its price and market capitalization. We will then summarize what the most prominent crypto-influencers and analysts have to say about LUNA’s performance, along with its Fear & Greed Index. We will also briefly talk about whether you should invest in stablecoin or not.
LUNA’s price, volume, and everything in between
Beginning its journey at around $19 on 28 May 2022, LUNA quickly dropped below $5 the next day. By the end of May 2022, its value was just above $11, but it soon spiralled south as June began.
Over the next few months, the value of LUNA kept oscillating between $1.7 and $2.5. At press time, it was trading at $0.93 as bears took control of the market with a market cap of $243 million.
Source: LUNA/USDT, TradingView
Here, it’s worth noting that back in June 2022, its market cap was over $300 million, but it kept oscillating between $210 and $300 million during much of July. Right now, the market cap is still within that range.
The crisis that unfolded following the collapse of the twin coins impacted the course of the entire market. LUNA has been particularly vulnerable to volatile market conditions. The Russia-Ukraine crisis and increasing crypto-regulations across the globe have also curtailed the movement of the market.
LUNA’s 2025 Predictions
Before reading further, readers should understand that the market prediction of different cryptocurrency analysts can widely vary. And, a good number of times, these predictions have been proven wrong. Different analysts choose different sets of parameters to arrive at their forecasts. Also, nobody can foresee unpredictable socio-political events that ultimately end up affecting the market.
Let us now have a look at what different analysts have to say about the future of LUNA in 2025.
A Changelly blogpost says that experts have predicted that the price of LUNA will oscillate between $5.06 and $6.07. Its average trading cost during the said year will be around $5.20.
DigitalCoinPrice is similarly bullish in its assessment of the future of LUNA, predicting its minimum and maximum prices in 2025 to be $2.75 and $3.32. It predicts its average price in the said year to be $3.19.
LUNA’s 2030 Predictions
The aforementioned Changelly analysis predicts that the maximum and minimum prices of LUNA in 2030 will be $37.54 and $31.24. The average price of LUNA in the said year will be $32.11.
DigitalCoinPrice continues to remain extremely enthusiastic about the future of LUNA. It predicts that it will be traded as low as $9.1 and as high as $9.79, with its average price being $9.45.
Disclaimer
Now, the aforementioned are more recent predictions. Before the events of the last few months, analysts were way more optimistic about the fortunes of LUNA.
Consider Finder’s panel of experts, for instance. In fact, they forecasted a price of $390 by 2025 and $997 by 2030.
“The likes of Digital Capital Management’s Ben Ritchie claimed, The LUNA token will continue to gain traction as long as there are no clear regulations in stablecoins. We believe that LUNA and UST will have an advantage and be adopted as a major stablecoin across the crypto space. LUNA is burnt to mint a UST, so if the adoption of UST grows, the LUNA will benefit greatly. Having Bitcoin as a reserve asset is a great decision by the Terra governance.”
There were contrary opinions too. According to Dimitrios Salampasis,
“Algorithmic stablecoins are considered as being inherently fragile and are not stable at all. In my opinion, LUNA will be existing in a state of perpetual vulnerability.”
That’s not all. In fact, at one point of time, there was also talk of Terra emerging as the most staked asset.
Source: Finder
Fear & Greed Index
At press time, the fear and greed index for the token showed a “Neutral” market sentiment.
Source: CFGI.io
As the legal troubles for the Terra founders do not subside, there does not seem to be many possibilities of investors trusting the altcoin. Many exchanges continue to put warning tags along the listing of LUNA and investors remain highly cautious. However, at press the fear and greed index for the crypto market stood in the ‘Greed’ category.
News reports of Kwon’s arrest have completely changed the dynamics for the Luna coin as further revelations from him might make its price fall even lower.
Many exchanges continue to put warning tags along the listing of LUNA and investors remain highly cautious. At press time, the fear and greed index for the token suggested a ‘fearful’ market sentiment.
We will also have to see how the community of LUNA developers and investors acts in the next few weeks. If they burn enough tokens so as to drive up its price, it can prove to be beneficial for its future. A sustained effort on the part of the cryptocurrency industry, in particular the LUNA community, can go a long way in restoring the trust of investors in the market.
In an interview with Laura Shin on the “Unchained” podcast, Kwon said that he moved to Singapore from South Korea before the collapse of the Terra ecosystem. So, it should not be assumed that he ran away to escape the authorities. He denied claims that he is on the run from law enforcement.
Kwon said, “Whatever issues existed in Terra’s design, its weakness [in responding] to the cruelty of the markets, it’s my responsibility and my responsibility alone.”
We must again reiterate that market forecasts aren’t set in stone and can go wildly wrong, particularly in a market as volatile as that of cryptocurrencies. Investors should, therefore, take due caution before investing in LUNA.
