“Bottom-catching” LUNA is like playing the lottery
After the incident that led to the collapse of the operating model in May, Terra Network (LUNA) has returned with a new version of Terra 2.0. Due to being the focus of public opinion over the past time, as soon as it was listed again, LUNA immediately attracted great attention.
In the past afternoon, the new LUNA price had a point of time reaching 25 USD, 25 times higher than the listed price. At the moment, the price of this cryptocurrency is moving sideways around $8.6.
Because of very strong price fluctuations, many investors are thinking of putting money into LUNA like a lottery game. This means, their purpose when participating in buying and selling LUNA is not investment but actually speculation.
Hoang Tan (Hai Ba Trung, Hanoi) is an investor who “bottomed” LUNA last week. Sharing with VietNamNet, he said he was fully aware of the risk of losing all his money.
“I determined to win or lose, so I only spent a small amount of money, about 2 million VND, to surf LUNA. If the price doubles or triples, that’s good, but if not, it doesn’t matter,” said Mr. Tan.
People like Mr. Tan are not an isolated case. This investor’s thinking reflects the general sentiment of those who are willing to spend money “bottom-fishing” LUNA over the past time. Many people are willing to accept the loss of their money, expecting in return to make money quickly, sometimes several times more than the original in a short time.
In the hometown of Do Kwon – the founder of Terra Network, in the past 1 month alone, there have been 180,000 more LUNA holders. The number of LUNA holders in Korea is now 3 times larger than before the terrible crash with LUNA.
It is the “bottom-fishing” mentality of “players” that has created an abundant liquidity flow for LUNA and has a continuous impact on the selling price of this cryptocurrency.
Will old LUNA buyers make a profit?
After the incident, there are currently 2 parallel product lines, including the old LUNA (Terra Classic or LUNC) and the new LUNA (Terra 2.0).
Those who buy old LUNA before May 26 will own both LUNC (old LUNA renamed) and LUNA (allocated free of charge by the system).
Suppose an investor spends 100 USD to catch the old LUNA bottom on May 24th (1 week ago), they will own about 633,000 old LUNA (average price 0.000158 USD), equivalent to 633,000 LUNC .
This number of LUNCs will help investors be allocated about 9.68 LUNA 2.0. At the current price ($8.6), the new LUNA that the investor receives is worth about 83 USD.
Due to the Terra network controlling the allocation scheme, only 30% of the LUNAs are immediately distributed to user accounts. The remaining 70% will be amortized over 24 months (starting from December 2022).
With the above problem, if investors “bottom-fished” the old LUNA with 100 USD on March 24, so far they have only received about 2.9 LUNA 2.0 coins. Although the price of LUNA 2.0 increased sharply after listing, the amount that investors earned was only about 25 USD.
At the moment, the old LUNA coin (LUNC) is trading for about $0.00012. With 633,000 LUNC in hand, the old LUNA “bottom-fishing” investor owns $76 worth of LUNC.
Thus, if you include the existing old LUNA (LUNC) and new LUNA (LUNA 2.0), the total amount of cryptocurrencies they are holding will be worth about 101 USD.
If you deduct the transaction fee, it can be seen that the old LUNA “bottom fisher” at the time of May 24 was almost unprofitable. Meanwhile, the risk of losing the investment amount is very large.
With LUNA’s recent history of strong price fluctuations, investors should consider carefully before deciding to put more money into both the old and new versions of this cryptocurrency.