Chinese Internet Users Closely Watching Cryptocurrency Crash

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Bye China banned cryptocurrency tradingits people are still interested in the ups and downs of the crypto market, not least because many of them have found workarounds and continue to buy and sell all sorts of tokens.

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The price of bitcoin continued to fall on Monday after a difficult weekend, dropping over 50% from its November 2021 peak of $69,000 and approaching the $30,000 mark. Like my colleague Jacqueline wrotethe crash is happening in tandem with the depegging of the algorithmic stablecoin terraUSD (UST).

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A stablecoin is a digital currency that is pegged to a more stable reserve asset such as the US dollar or gold and is designed to reduce volatility by offering the benefits of a digital currency such as fast transactions. An algorithmic stablecoin is one that relies on algorithms to maintain a price similar to that of a central bank, rather than having real money in reserve to back it up. UST is created by “burning” the related Luna token using smart contracts or lines of code written to the blockchain to automatically execute decisions.

Terraform Labs, the organization behind UST, the Luna cryptocurrency, and the Luna Foundation Guard, has emptied its treasury wallet all his bitcoin, about 42,530 bitcoins, or $1.3 billion, on Monday. The price of UST dropped to around $0.95.

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On the same day, the hashtag #luna rose to the top ten keywords on Weibo, which is the Chinese equivalent of Twitter and is widely regarded as the leader of public discussion in the country. Posts with the hashtag #luna had nearly 15 million views as of Monday evening.

“LFG [Luna Foundation Guard] announced a $1.5 billion loan to rejuvenate the UST, but from my perspective, Luna is out of date. Even if he is rescued, he may continue to suffer from Parkinson’s disease, shivering for half the rest of his life. No one will dare to intervene after such a crisis of confidence.” wrote one user with over 200,000 followers on Weibo. Others shared screenshots of their losses incurred as a result of the Luna crash, which dropped over 50% in price in 24 hours.

While it’s hard to measure how many people in China trade crypto, nearly 10% of web traffic on OKX, which consistently ranks #1 of the world’s 15 exchanges, comes from China, according to the web analytics company. Similar websites (h/t Wu Blockchain).


Credit: techcrunch.com /

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