No, Terra Classic (LUNC) Will Not Return to $1
A case of too little, too late.
All of a sudden, LUNC’s price just started pumping.
The crypto’s back with a vengeance. Firm believers of it (historically known as LUNA) expected this to make the top-10 list of cryptos once again.
Terra Classic is “going to the moon” and “LUNC $1 WILL HAPPEN!” so say some enthusiasts on the interwebs right now.
A key for reason for this major price boost: the proposed 1.2% tax burn on LUNC, which, in turn, will help reduce the colossal supply of LUNC (more on that shortly).
For those who are unaware, Terra Classic experienced an insane ~99% crash of this token in May, in the space of a few days. This occurred alongside the significant de-pegging of USTC (previously UST), the former’s algorithmic stablecoin.
For brevity, I will refrain from explaining how it all works, the historic period of this price crash, and the immediate aftermath. I recommend this video from ColdFusion instead.
In a nutshell, to counteract the old UST (the supposed stablecoins) collapse in price, the Bitcoin holdings of the Luna Foundation Guard (LFG) dumped ~80,000 BTC (roughly $1.5 billion) in days to rescue it; ultimately to no avail.
This entire process also lead to trillions of LUNC tokens being minted, thus, rapidly diluting its price, plummeting to less than a cent from $116 or thereabouts), as illustrated below.
Returning to current events. Thinking of the price pump, LUNC enthusiasts that have already made a modest ROI for the hype in the past 1–2 weeks are in full-swing once again.
There’s never a shortage of activity on Twitter, especially when you search $LUNC, Luna Classic, #LUNC Burn…and the list continues.
Many passionate supporters here, but there is one that stood out for me, and is worthy of a mention with over 1,000 likes and hundreds of retweets.
“Inevitable”? Let’s put these things into perspective.
Many enthusiasts still disregard or do not bother understanding tokenomics of a given crypto. Perhaps Luna C Whale did, but I am sceptical.
For example, a crypto’s circulating and max supply. LUNC currently has a circulating supply of ~6.1 trillion, and a max supply of roughly 6.9 trillion.
Even if LUNC’s circulating supply were to magically drop by 80%, it would still require a valuation of over $1.2 trillion dollars if LUNC ever hit $1.
For more context, this would have to match Bitcoin’s market cap at its peak which was around $1.26 trillion last November.
How likely is that that the supply will conveniently drop by about 80% and the entire Luna Classic community, speculators and others would be willing to boost LUNC’s market cap to roughly $1.2 trillion?
Very wishful thinking.
Believe it or not (and as a disclaimer) I still hold LUNC. It sounds nonsensical for some of you, I know. However, I do not see the point in selling when I would get peanuts for what I hold.
So could the price rise and could the crypto even hit the elusive (yet more plausible) target of $0.01. Well, anything is possible, and I would not rule out $0.01, but I definitely would not be holding my breath.
Why I do think this could still be possible?
This market is irrational, that is why, especially many altcoins.
Time and time again, notably in December 2017/January 2018 and 2021, altcoins went gangbusters following the meteoric rapid rise of Bitcoin to set respective all-time highs for these periods.
People inject a lot of stupid money into meme coins and random alts, that reach ridiculous heights in very short periods of time.
Case in point: In two years, Shiba Inu’s (SHIB) market caps reached exceeded that of companies such as Nissan and LG, each of which has existed for over 75 years.
I could make comparisons with other companies’ market caps, but you know what I mean.
SHIB’s market cap peaked at roughly $37 billion. Dogecoin (DOGE) took it a step further, whereby its (circulating) market cap reached a whopping $88 billion in May 2021; the MC remained above $50 billion for most of that month.
The list goes on, and people pump and dump cryptos frequently, in the hope of finding another 1000x ROI gem, buying the Lambo, the house …so on and so forth.
Before I get carried away any further, back to LUNC, and reinforcing my point about some cryptos being irrational at times.
I will give ‘credit’ where it’s due. If you were willing to buy the token when it collapsed in price in May, held, and then sold earlier this week, you could have made over 33,500%.
Does this mean that I would buy into it? No, not now.
If you had $50, $100, or x amount to throw away, and you want to see what could happen to LUNC during an insane market-wide bull run, then go ahead.
As I do with various crypto assets, I prefer to have some skin in the game, as opposed to completely sitting on the sidelines.
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Whatever you choose to do, that’s your decision; don’t let me stop you.
Long story short, few people can take LUNA, LUNC, Do Kwon (its infamous founder) or anything affiliated with this project seriously, at least not reputable institutional investors.
Kwon has developed such a notorious reputation he and Terraform Labs are being subject to a US Securities and Exchange Commission (US SEC) investigation.
South Korean authorities have started investigating him for tax fraud.
Moreover, Anonymous sent him some a stern message as well. I highly recommend watching the attached video.
Any miraculous comeback related to these cryptos or projects would be too little, too late.
I am specifically referring to people who lost considerable sums of money be investing in this. Yes, I realise that they are also responsible for investing huge amounts, and should have been more careful.
However, the real issue here is the actions of Terraform Labs and Do Kwon, hence, the SEC investigation.
In simple words, I consider LUNA, LUNC and any forks, spin-offs, etc. to be akin to a meme coin now.
Oh, before I forget. I know what people will tell me in response to this piece. “Oh, you’re just bitter because you lost money on Terra Classic.”
I’ve lost a few hundred dollars so far, and have clawed back most of my losses by converting LUNC to major cryptos such as BTC, ETH and ADA in recent days.
If you think I’m “bitter”, “upset”, “devastated”, “disappointed” (this one, yes), then you should consider those who are struggling to make ends meet that are due to factors readily behind their control.
Most people’s lives would go on if they lost a few hundred dollars. So, hold your horses before jumping to conclusions.
To reiterate, with the exodus of Terra developers, the lack of trust most would have towards this, not to mention other matters addressed above, it would take something miraculous for LUNC to ever hit $1, let alone a cent; it is highly unlikely to occur anytime soon either.
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None of this is financial advice and I am not a financial advisor. It is a mixture of stats, news and opinions from either myself or the links provided. Please do your own research prior to investing in any crypto assets, let alone any product affiliated with this space.
Moreover, please double check the authenticity of all sources included herein, such as the tweet, to verify how trustworthy they are (or otherwise).
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