- It has been 1 year since the LUNA crash on May 11, 2022.
- The LUNA crash not only sank one project, but also shook Bitcoin.
1 Year Anniversary of the LUNA and UST Crash! Binance CEO CZ reminds us of Bitcoin’s drop on that day.
Today is the Anniversary of the LUNA Crash!
On the anniversary of the LUNA crash, Binance CEO Changpeng Zhao (CZ) evaluated the lessons learned from the event that saw a $40 billion loss in value and a significant drop in Bitcoin. Since his “poor again” tweet after the May 9, 2022 incident, he has been emphasizing transparency and user protection.
This morning, CZ tweeted about Bitcoin’s price movement history:
A year ago today, UST/LUNA crashed. $40 billion in value gone. BTC went from 28k to 19k. A few lessons can be learned. pic.twitter.com/h0Hyj5elx6
— CZ 🔶 Binance (@cz_binance) May 11, 2023
In his tweet, CZ said: “A year ago today, UST/LUNA crashed. $40 billion in value gone. BTC went from 28k to 19k. A few lessons can be learned.”
Although the LUNA crash happened a year ago, the lessons learned from it are still relevant today. After the crash, CZ pushed for transparency and user protection, stating that Binance’s Terra project team would allow retail users to be compensated first and that Binance would be compensated last.
This reflects the industry’s current efforts to increase liquidity and protect users from losses.
Forget Everything You Know But Don’t Forget the BTC Drop
The LUNA and TerraUSD (UST) crash not only wiped out $40 billion, but also caused BTC to drop from 28k to 19k. CZ’s tweet also highlights the danger of emotional trading and the need for someone to be strategic and disciplined in their investment approach.
One way to reduce the risks of such crashes is to increase liquidity in the market. This is a challenge, especially in the face of increased regulatory scrutiny, but efforts are ongoing. For example, the DeFi industry is exploring ways to create more stablecoins backed not only by the US dollar, but also by a range of assets.
The lessons learned from the LUNA crash remain relevant today as the industry grapples with liquidity, interoperability, and user protection issues. The LUNA crash shocked the industry, and CZ’s thoughts offer insights into the importance of responsible leadership in the crypto world.
