Terra LUNA קראַש ווינדיקייץ לאַנד ס פאַרבאָט אויף קריפּטאָ-פֿאַרבונדענע אַקטיוויטעטן - פעאַטורעד ביטקאָין נייַעס

An op-ed article published in the state-backed Chinese publication Economic Daily, has suggested that the recent crash of the Terra blockchain’s LUNA and the de-pegging of the UST stablecoin vindicate the Asian country’s decision to ban crypto-related activities. In the article, the author names the interest rate hikes by the U.S. Federal Reserve and the buying and selling of crypto assets by several investment giants as the causes of the recent market crash.

Impact of Recent US Interest Rate Hike

An author writing for China’s state-backed publication, Economic Daily, has argued that the recent crash of Terra’s LUNA and the de-pegging of the UST stablecoin vindicates his country’s decision to block or prohibit virtual currency-related activities. The author, Li Hualin, also claimed that China’s “decisive” and “timely” action helped to “extinguish the ‘virtual fire’ of virtual currency speculation and put ‘protection locks’ on investors’ wallets.”

As געמאלדן by Bitcoin.com News, Terra blockchain’s native token LUNA’s troubles started after the network’s other project, the algorithmic stablecoin UST, lost its peg against the U.S. dollar. Initial efforts to rescue the stablecoin precipitated the native token’s plunge from a price of over $87 on May 4, 2022, to a current price of just under $0.0003.

While some crypto experts have placed the blame for the token’s crash on the actions of the project’s leader, Do Kwon, in the מיינונג שטיק, the Chinese author appears to attribute the token’s fall mainly to the raising of interest rates by the U.S. Federal Reserve. Explaining how the rate rise caused the token to plummet, the author wrote:

Since the beginning of this year, the Federal Reserve has launched an interest rate hike cycle, and global liquidity has tightened. Especially in early May, the Federal Reserve raised interest rates by 50 basis points at a time, which had a negative impact on capital and market sentiment, and virtual currencies were the first to bear the brunt.

Virtual Currency and the Chinese Law

Following the crash of the two Terra tokens, some within the crypto community are still trying to piece together what may have caused the spectacular collapse. However, others have already accused two firms, Blackrock and Citadel, of being behind LUNA’s woes. These allegations have been פארווארפן by the firms.

The Chinese author, in the meantime, claims in the piece that the involvement of investment giants in crypto markets “can lead to violent fluctuations in currency values, triggering a large number of sell-offs.”

Hualin also reiterated that virtual currency transactions are not protected by Chinese law. These comments appear to contradict the recent Shanghai High People’s Court מישפּעט affirming bitcoin to be a virtual asset protected by Chinese law.

The author ends the article by urging investors to “remain rational, promptly eliminate the greed of bottom-hunting and get rich overnight, and stay away from related trading speculations, otherwise it is very likely that ‘currency will go to the fortune.’”

וואָס זענען דיין געדאנקען וועגן דעם דערציילונג? דערציילן אונדז וואָס איר טראַכטן אין די באַמערקונגען אָפּטיילונג אונטן.

Terence Zimwara

Terence Zimwara איז אַ זימבאַבווע אַוואָרד-ווינינג זשורנאַליסט, מחבר און שרייַבער. ער האט געשריבן ברייט וועגן די עקאָנאָמיש קאָפּדרייעניש פון עטלעכע אפריקאנער לענדער ווי געזונט ווי ווי דיגיטאַל קעראַנסיז קענען צושטעלן אפריקאנער אַ אַנטלויפן מאַרשרוט.

בילד קרעדיץ: שוטטערסטאָקק, פּיקסאַבייַ, Wiki Commons