On 11 May, Gold bug Peter Schiff, CEO of Euro Pacific Capital, took to Twitter to comment on Terra (LUNA) and its UST tied to the US dollar.
LUNA can’t sell enough Bitcoin to keep UST at $1, according to Bitcoin sceptic Peter Schiff, since Bitcoin can’t provide enough liquidity for it. A stablecoin supported by Bitcoin, he added, is “backed by nothing.”
In the midst of a major selloff, both cryptocurrencies are plummeting. In the last 24 hours, the stablecoin that lost its peg to the US dollar has dropped by over 49 percent, trading at $0.4832.
Terra (LUNA), the ecosystem’s first coin, has plummeted 83.46 percent to $4.02 after trading at $87 on May 4. The cryptocurrency was trading at an all-time high of $119 in early April, well beyond the $100 mark.
UST is an algorithmic stablecoin designed to trade 1:1 with the US dollar. According to Colin Wu, 46,239,360 LUNA were issued on May 10th. Over 80 million additional LUNA tokens have been created in the last four days.
In an attempt to keep the price at $1, 1.2 billion UST were destroyed on May 10. This burn set a new record for the amount of cryptocurrency burned in one day.
However, the coin continues to lose its peg to the US dollar, currently trading below $0.5.
On Sunday, the UST lost its USD peg for the first time. LFG (Luna Foundation Guard) has acquired another 37,863 Bitcoins (holding a total of 80,394 BTC back then).
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