Where is the bitcoin reserve that Terra created for UST?

Luna also began selling off when UST fell below $1 last week. This created a vicious circle that saw UST plummet to 30 cents and luna become worthless. According to CoinGecko data, UST now has a value of just 9 cents.

Frances Coppola, an independent economist, stated that the problem with a partially collateralized stablecoin such as UST is that your hard collateral — bitcoin in this instance — will be significantly more valuable to [investors] than your governance token.”

Elliptic, a blockchain analytics firm, estimates that holders UST and luna have lost $42 billion in the past week. The company’s analysis shows that 52,189 bitcoins were transferred from one account to crypto exchange Gemini while another 28,205 bitcoins were sent to Binance. The chief scientist at Elliptic Tom Robinson said that it was impossible to track the movements of funds beyond these wallets.

The debacle swept through crypto markets and wiped out more than $200 Billion of wealth in one day. Bitcoin briefly fell below $26,000 on Thursday, its lowest point since December 2020. The world’s largest cryptocurrency traded at $29,526.75, a 1.4% decrease in 24 hours.

“There is not a lot of outstanding selling pressure,” stated Dustin Teander, an analyst at Messari crypto research firm.

“In a certain sense, the market will take that as a kind of bullish.”