The expectations for Terra Classic (LUNC-USD) have been at rock-bottom levels recently. But, that’s not getting to the tight-knit community of bulls still active on the project; rather, it’s helping to fuel the community’s effort to get LUNC crypto prices back on track. Today, investors are seeing these LUNC buffs trying to up the price through a coordinated burn effort. But, will this be enough to get the coin started back on the right track?
It wouldn’t be a stretch to suggest Terra as a primary reason for the crypto crash this summer. The project — at the time, the ninth-largest in the world — produced much of the market turmoil as a result of its stablecoin TerraClassicUSD (USTC-USD) falling from its peg. Being an algorithmic stablecoin, USTC was very easily disturbed as a result of mass selling of the token.
While it seems like a minor issue, it becomes far more concerning when one considers Terra’s size and the fact that many retail and institutional investors had massive exposure to Luna Classic and the stablecoin. As users began selling off assets, the prices of both coins continued to tank. The large holdings by companies like Celsius (CEL-USD) and Voyager Digital wound up plunging the companies into debt. Now, both these companies and many others are bankrupt.
The ripple effect of the event goes even beyond this, with Terra’s failure influencing a wider market downturn, driving Bitcoin (BTC-USD) prices below $20,000 and sending the global crypto market capitalization below $1 trillion. However, it seems prices are beginning a bit of a reversal. Bolstered by bullish events on the horizon, like the Ethereum (ETH-USD) Merge upgrade, there is money coming back into crypto. Users who stuck with Terra Classic through its turbulent reorganizing strategy say the time is ripe for their own catalyst.
Terra Classic Trending on Twitter as Users Attempt Burn-Fueled Price Rebound
Terra has undergone an intense makeover as a result of its failure. Now two different networks, Terra Classic and Terra 2.0 (LUNA-USD), most have opted for the new 2.0 network over the Classic one — a husk of its former self. Although, there are a sizable number of LUNC crypto die-hards, those who think a lucrative opportunity exists in the coin. Will they prove correct? A new coin burning effort will be the first indicator.
#LunaClassic is trending across Twitter as users pump a new coin burning proposal which passed successfully through the community recently. Last week, a developer secured approval to implement a 1.2% burn tax on all transactions, hoping to harness the same supply and demand economics which gave the original Terra ecosystem its equilibrium. By slowly constricting the total supply of LUNC, users are hoping to inflate the demand for it, bringing up USTC prices back toward their peg as well. Naturally, this plan comes with the caveat that demand rises, or at least holds its current size. Whether users actually turn to the network as a result of shrinking supply is a question that remains.
LUNC crypto prices are seeing a bit of a boost as a result of the positive news. Prices are up by about 2% over the last 24 hours. About $122 million worth of LUNC is swapping hands today, keeping largely in line with recent volume trends. Of course, this volume could be expected to rise as the burn tax is implemented on the network. As of right now, the update is only available on the Terra Classic test network.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.