INVESTORS in a crashed cryptocurrency have told how they have lost fortunes and fear homelessness after its value plummeted by an unprecedented 98 percent.
Terra Luna, which was among the top 10 most valuable cryptocurrencies in the world, slumped below $1 on Wednesday, having peaked close to $120 only last month.
Incredibly, the dramatic collapse occurred in the space of just 24 hours with its market cap spiralling from above $40bn to just $500m.
The shock crash sparked holders of Terra Luna to flood to discussion site Reddit to tell of the nightmare financial ruin they were now staring down the barrel of.
One user claimed to have "lost over $450,000" in an extraordinary confession, grimly adding they "cannot pay the bank".
“I will lose my home soon. I’ll become homeless,” they shockingly admitted on the TerraLuna sub-Reddit.
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The widespread scale of the crash was evident in other posts on the site as others shared heart-breaking stories of the losses they have been left with.
One user claimed to have lost $15,000 after failing to sell their holdings for a substantial profit when it was trading above $100 last month.
Another down-on-their luck investor said: “I should’ve cashed out when it was $100, then I would have been up $25,000.
“But I got greedy hoping to get more money so I can at least afford a downpayment for a house for my family."
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"I guess no house and savings then”, they said.
While another shared a heart braking story of how they had "lost around $5000" which they said was "all my life savings" .
The user claimed to have bought the doomed cryptocurrency at $85 dollars and it the investment "was all I had".
Do Kwon, who founded Terra creators Terraform Labs, tweeted on Tuesday: “Close to announcing a recovery plan for $UST. Hang tight.”
The risks of buying with cryptocurrencies
Investing and making a purchase in cryptocurrencies such as Bitcoin is risky .
Their value is highly volatile and City watchdog the Financial Conduct Authority has warned investors should be prepared to lose all their money.
Investing in cryptocurrencies is not a guaranteed way to make money.
You should also think carefully about making purchases with a cryptocurrency.
For example, Bitcoin has had wild price fluctuations in recent months and the price can change on an almost hourly basis.
The price of a Bitcoin was at $40,258 on January 9, according to Coindesk, but fell to $34,214 just three days later.
That's a 15% drop.
These price swings are risky for a business as you could sell an item for a Bitcoin at one price and the value may drop soon after, leaving you with less money from a sale.
Similarly, the price of Bitcoin has soared by more than 21% since the start of this week so it can be hard for a shopper to get an accurate idea of the price of an item if its value changes on a daily basis.
He added: “I understand the last 72 hours have been extremely tough on all of you – know that I am resolved to work with every one of you to weather this crisis, and we will build our way out of this."
And in an extraordinary comment, he pledged "Terra’s return to form will be a sight to behold".
Crypto exchange Binance temporarily suspended withdrawals on Terra (LUNA) network at one point during the collapse.
It meant that even those who wanted to sell were unable to cash in last minute as the price went into free fall.
The sell-off came as Terra – a stablecoin – lost its peg to the U.S. dollar, wiping out the price of its support coin luna which went on to lose 99 percent of its value.
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Investing and making a purchase in cryptocurrencies such as Bitcoin is incredibly risky.
Their value is highly volatile and The City watchdog the Financial Conduct Authority has previously warned investors should be prepared to lose all their money when they flirt with crypto.
What is cryptocurrency?
CRYPTOCURRENCIES are a form of payment that can be exchanged for goods and services.
They work using a technology called blockchain.
Blockchain is a decentralised technology spread across computers that manages and records transactions. Find out more about cryptocurrencies below..
- What is Bitcoin and will BTC's price rise?
- What is Ethereum and will ETH reach $10,000?
- What is Cardano and will ADA reach $10?
- What is Litecoin?
- Why is Bitcoin bad for the environment?
- Who is Bitcoin creator Satoshi Nakamoto and what's his net worth?
- Best crypto wallets to use for Bitcoin: From Coinbase to Exodus
- Where to buy cryptocurrency?
- What is Dogecoin and will DOGE reach $1?
- Will Polygon (MATIC) reach $10?
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