"I lost all my savings": Investors share their experiences after the LUNA and UST fall.
One famous YouTuber lost $3 million, another user claimed to have lost his grandmother's inheritance, and several acknowledged themselves bankrupt after Terra's crash. This week, the collapse of the Terra ecosystem has been arguably the hottest story in crypto space.
Developers expected the USD Terra algorithmic stablecoin (UST) to maintain a price equal to the US dollar, lost its parity, and collapsed to lows of $0.3. The incident negatively impacted the price of LUNA, Terra's native cryptocurrency, which slid more than 90% by mid-week. In less than 72 hours, the rest of the cryptocurrency market saw a massive bloodbath. The move also affected other stablecoins, such as Tether. Some argue that the solution could be in Central Bank Digital Currencies (CBDC), although others see them as the most important threat to cryptocurrencies.
Some individuals revealed their investing stories and experiences, some of which were pretty terrible and devastating. Others came to cheer up the depressed, and there were plenty of memes and jokes to go around.
"I lost all my life savings"
UST had shown signs of volatility over the weekend, prompting the organization behind the project to take action to recover parity. However, on Wednesday, the crash came later when the stablecoin's progressive instability hit its sister token, LUNA, all at once. UST works through a mechanism of minting and burning LUNA to maintain its parity with the dollar, a system previously described as a novel but showed its flaws this week.
Terra's cryptocurrency went from 100 to 0 in a few hours. LUNA was trading as high as $20 by Wednesday morning and, before the close of business, fell to lows of $1. Just a week ago, the asset was trading above $80. The plunge dropped LUNA well below the top of the list of major cryptocurrencies, as its market capitalization fell from $30 billion to less than $500 million.
"I lost all my life savings," wrote a r/TerraLuna sub-Reddit member about the events. "I had bought Luna at USD$85, not sure what to do." Another trader said he had lost USD$15,000 after the crash. The same person said he had faith in the project. "Guess no house and no savings then," he wrote, adding that he was at least grateful to "have a very supportive husband and two lovely children."
Many forum members shared similar sentiments. In a post that publicly queried the losses, more than a dozen investors claimed to have lost over $10,000 following the recent crash. Among them, several claimed to have recorded damages in the millions. "I lost $430,000. It was my grandmother's inheritance," said one.
Terra community mourns
Even some celebrities lamented the collapse. British YouTuber and rapper JJ Olatunji, better known as KSI, shared with his more than 7 million Twitter followers that he had seen his multi-million investment in LUNA vanish in a few hours. He also admitted the loss in a post on his Crypto Twitter account.
There was no shortage of moans and regrets from the community. Many forum members indicated that the losses had left them with significant problems, ranging from bank debt to losing a home and even bankruptcy. In fact, among the most extreme cases, some users expressed a desire to take their own lives.
"I lost more than $450,000. I can't pay the bank," commented one Terra forum member. "I will lose my home soon. I will be homeless. Suicide is the only way out for me." Meanwhile, another user related the story of a close friend in an attempt to encourage the more bereaved members of the group:
My friend and former colleague (my manager for 15 years) attempted suicide this morning. He moved all his savings into cryptocurrencies in 2021, and LUNA was a significant player in his portfolio. I just wanted to tell you: if you feel pain and think your life is miserable without money, feel failure and stuff... turn to the people you love. You are not alone[...] Don't overestimate the value of money. Life has a much greater value.
The number of comments with this tone was so high that the moderators of the Reddit forum, which registers more than 44,000 members, even posted a publication with the help phone numbers at the top of the web page.
Memes to raise spirits
Among the gestures of solidarity and encouragement, some members sought to raise the general spirits of the community through some funny jokes and memes. One of the reasons for jokes was that LUNA fell in price to $1, while, ironically, UST failed to stabilize to reconquer its expected level of $1. "I have 99 problems, and UST is not 1," says one of the memes shared on the forum, whose pun refers to this irony.
"Easy solution: just rename the currency to Terra-0.5-USD," joked another. "I'm laughing to keep from crying," said one of the users who shared another meme.
The most recent collapse of the Terra ecosystem could serve as a lesson, albeit a painful one, for some investors and a warning to future users about the possible consequences of trading in the crypto market. Cryptocurrencies remain a growing sector that can be risky to wade into, and an iron stomach is undoubtedly needed.