The past week has been a dark period in the history of crypto, with the industry’s total market cap dropping to $1.2 trillion for the first time since July 2021.
On May 4, Terra (LUNA) was still in the top 10 of most valuable cryptocurrencies. A single LUNA token then traded at a price of $85. The coin’s all-time high is even at $119.5. However, on May 11, the price of the token had fallen to $15. And 48 hours later, the token has lost 99.98% of its value which is currently trading at a price of $0.00003465.
Much of the turmoil caused by Luna is due to the breakup of Terra’s algorithmic stablecoin based on the Cosmos protocol. At the same time, Terra’s demise calls into question the practicality and long-term viability of algorithmic stablecoins.
The characteristics of algorithmic stablecoins contributed to the decline
Unlike Tether’s USDT or Circle’s USDC, which are backed by fiat money or equivalent assets, Terra is designed to maintain the peg through a mathematical algorithm and active trading. Recently, the UST has “decoupled” from its $1 value. This caused enormous selling pressure and a major fall in the price.
Since the tokens are connected by on-chain mint-and-burn mechanics, that massive short-circuit led to sharp drops on both UST and its sister token LUNA. Then the “de-peg” or decoupling with the dollar also took place. When the traders realized that $1 in LUNA was no longer $1 in UST, they became insolvent. As a result, the LUNA crashed at 98% of its price and lost most of its market cap.
What can we learn from Luna?
After such a massive Luna price drop, investors may be concerned: how can I avoid such a collapse happening to me? Regarding this concern, an experienced crypto analyst from Bexplus shows his perspective.
In fact, the characteristics of altcoins determine Luna’s volatility and high risk. In terms of risk resilience, mainstream currencies (Bitcoin, Ethereum, etc.) are undoubtedly stronger. However, the Bitcoin market has not been stable lately. The market is in a cold crypto winter, a bear market. But there are still traders who make over 1000% of the ROI in a bear market, in fact any trader with 100x leverage can multiply their ROI.
How does a 100x lever work?
With 100x leverage, traders can use 1 BTC to open a position of 100 BTC by going long (predictive BTC price will rise) or short (predictive BTC price will fall). This allows traders to trade with $1 as if they had a $100 position, while at the same time traders can also get all the profits brought in by the $100.
Let’s use an example to illustrate how 100x leverage works. Assuming we use 1 BTC to open a long contract when Bitcoin trades at $30,000. A day later, Bitcoin’s price rises to $35,000. The profit is ($35,000 – $30,000) * 100 BTC/$35,000 * 100% ≈ 14.2 BTC, making the ROI 1420%.
The recommended platform with 100x leverage
Bexplus, a reputable crypto futures trading platform accredited by the US FinCEN MSB (Money Services Business) offers 100x leverage futures trading on various trading pairs such as BTC, ETH, ADA, DOGE, XRP. Meanwhile, it does not need KYC and is popular among 1 million people worldwide. It is also known for the following features.
100% Deposit Bonus: Deposit 1 BTC = 2 BTC into your account
Bexplus’ 100% Deposit Bonus campaign helps every trader to maximize their profits as much as possible no matter in a bullish or bearish market. If you top up 1 BTC, you will have 2 BTC in your account and you can trade with the 2 BTC to make more profit. You can also withdraw the winnings earned from the bonus. With this 100% bonus, in the example above, you can earn 14.2 BTC × 2 = 28.4 BTC, making your ROI 2840%. NB! Up to 10 BTC bonuses can be obtained.
Copy Trading: Let superior traders make a profit for you
Copy trading gives any investor who has just entered the market the chance to trade like a veteran. It allows you to copy investment orders from experienced traders to let excellent traders make money for you. Copy trading also allows you to adjust the share of your copy order, set take profit and stop loss or terminate the copied order at any time. For veterans, you can also get some benefits from your followers. It is a win-win strategy for both the veteran and the novice.
- Demo account with 10 BTC for traders to familiarize yourself with leverage.
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The banner of regular currencies will never fall. No matter in terms of anti-risk ability or volatility, mainstream currencies have incomparable benefits. Bexplus offers tools with the highest profit margins so that every trader can get their own maximum profit. to register now and receive your 100% bonus!
