Tether untethers, Luna demoons

Crypto troubles worsen with Tether considering a severance from its US dollar peg, and Luna proactively shutting down its blockchain to thwart a possible attack earlier today.

Tether plays a crucial role in stabilizing cryptocurrency prices, yet this afternoon, its value dropped below 96 cents, hitting a low of 95 cents around 3:15 AM EST. Since it’s linked to the USD, it’s expected to reflect the dollar's value closely. This detachment from its peg sends shockwaves through the crypto landscape, as Tether is a key instrument for trading other cryptocurrencies with a sense of security against future price drops.

On the flip side, Luna and its UST token were created by Terraform Labs. The UST had previously maintained a value of $1 but has plummeted to just 37 cents. Meanwhile, the Luna token has witnessed a staggering 99% decline, now valued at $0.01479. Both coins were intended to tame market volatility, a purpose they are currently failing at. On Thursday, the company halted the blockchain for several hours to prevent malicious actors from acquiring all tokens and enacting dubious changes to the governance of those tokens.

The direction of this decline is uncertain, but it’s shaping up to be a notably rough week for the crypto industry.

Photo by  Pedro Lastra  on  Unsplash

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