LUNA 2.0 – Should You Invest In It? Analyzing the Controversial Crypto


Luna’s crash has shaken the cryptocurrency market by its roots, sending shockwaves throughout the industry. The Terra ecosystem member’s crash was triggered by the long-expected fall of the Terra UST which had witnessed a marked decline due to it being depegged, leading to mass market volatility and extreme UST dumping.

CEO of the Terraform Labs, Do Kwon, launched the Luna 2.0 or LUNA2/USDC, on 28th May as an attempt to revive the Terra Ecosystem, as a rebranded version of the LUNA ( which is now known as LUNC). The Luna 2.0 still seems to command considerable interest and has been subject to a lot of speculation on its price and its future sustainability as a tradeable asset.

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The key question that arises is whether Luna2 will be able to bounce back and whether the token is a worthy investment?

LUNA Crash – Is LUNA Dead?

The LUNA ultimately suffered due to intense liquidation and it became vulnerable to extreme inflation. (In our past posts, we’ve covered the reasons for LUNA’s fall)

This is why, due to the rise in trading volume and the inability to meet the demand, the tokens suffered a market cap loss of close to $40-$50 billion dollars. What is even more worrisome is that the Luna had in fact seen a bull run of $119, and post the crash, is now reduced to fractions of its value.

The CEO, while announcing the launch reassured the investors of the success of the ‘hard fork’ approach, which ultimately delinks the Terra ecosystem from their preceding blockchains. Pegging is the process of tying or associating the value of one currency or asset to another, and usually, the value can be determined in a 1:1 ratio.

Whereas, depegging refers to the phenomenon of detaching the value of a stablecoin, which, in the present scenario resulted in an unexpected alteration in the market supply and demand. Luna 2.0, the sister token of the Terra Classic, unlike its predecessor, is not an algorithmically-backed stablecoin, i.e., it does not carry out the pegging process via smart contracts.

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Brief History of LUNA 2.0’s Pricing and Listing on Exchange Platforms

The token which garnered widespread market support was famously airdropped on Binance, and was also listed on various exchange platforms such as ByBit, Crypto.com, Kraken and FTX.  The token also supported spot, derivatives and futures trading, this is why it was hosted by a variety of renowned Wallets as well.

The widely anticipated revamped token marked its debut by launching at the price of $17.8, gradually Luna 2.0 began to increasingly peak, by reaching a high of $19.53. However, after the crash, it has taken a further hit and is now placed at a low of $5.51, plunging to a drop of close to 72%, over its lifetime, and casting doubts on its future performance as a valuable investment.

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Is LUNA 2.0 Worth Investing?

As part of a targeted, actionable recovery plan, the CEO Do Kwon has proposed several initiatives to revive the Luna 2.0 and make it an investable asset.

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The initial procedure would be introducing a type of shock absorber that will monitor demand and supply levels, stabilizing the token in such a manner, that it would be at low risk of depegging. Additional recovery options include raising funds close to 1.5 billion dollars and encouraging traders to use the Anchor Protocol, while making trades.

While it is difficult to make any definite, long-term predictions on the future of the token, there are some general market opinions about LUNA 2.0’s viability as an investment. Currently, LUNA 2.0, due to its steep bearish price action and heavy volatility is displaying a bearish outlook and most industry experts and analysts are hoping that the token will gradually become bullish.

Many speculators are also positive that the Luna Classic too can be successfully traded soon. Platforms such as eToro have already started LUNA or LUNC trading.

LUNA 2 price

Crypto.com resumed Trading of LUNA2/USDC Pair 

The general market expectation is that LUNA 2.0 may soon reach a high of close to $11, after which it may begin to steeply rise, giving better returns. There is very little possibility for it to replicate the LUNA Classic’s all-time high of $119 anytime soon, the most it can expect is to climb to a steady high of $26-$29, in the next three fiscal years.

Due to the crisis, most investors and traders sold the asset off believing it to be a dead investment, but there might still be a possibility that it will be able to reach LUNA’s ATH in a few years. It would all depend on maintaining trust in the minds of investors.

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What is most crucial for the LUNA 2.0 token is to attract more capital infusions and bring in more investors, by constantly expanding in a phased manner. Whatever the outcome, most experts recommend investing in the asset with due caution and after considerable research and care.

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