Terra (LUNA) Price Prediction 2025–2030: LUNA’s future depends on this factor

It has now been near­ly ten months since the cryp­to project Ter­ra Luna expe­ri­enced a cat­a­stroph­ic col­lapse in May last year. Lat­er, FTX col­lapsed and recent­ly, the cryp­to-friend­ly Sil­i­con Val­ley Bank (SVB) collapsed.

As the SEC charged Ter­ra founder Do Kwon with fraud over the $40 bil­lion cryp­to crash, it has adverse­ly affect­ed the mar­ket. As there is hard­ly any pos­i­tive news regard­ing its price move­ment, we can­not deny the fact that LUNA will nev­er be con­sid­ered a ‘safe’ cryp­tocur­ren­cy. There­fore, it may not be able to return to its for­mer heights again.

Read Price Pre­dic­tion for LUNA 2023–24

Sta­ble­coins, such as UST, were cre­at­ed to pro­tect investors from the extreme price volatil­i­ty of pop­u­lar cryp­tocur­ren­cies, such as Bit­coin (BTC).

As fiat cur­ren­cy is pegged to reserves such as gold, a sta­ble­coin is pegged to either a fiat cur­ren­cy (e.g. USD) or a sup­port­ing cryp­tocur­ren­cy. In this case, Ter­raUSD was pegged to Luna. But here­in lies the con­flict. A cryp­tocur­ren­cy isn’t equiv­a­lent to gold reserves. As LUNA prices got desta­bi­lized, it had an impact on UST prices too, and the entire sta­ble­coin sys­tem col­lapsed in the sec­ond quar­ter of 2022.

The sta­ble­coin project was aimed at com­ple­ment­ing the price sta­bil­i­ty and wide adop­tion of fiat cur­ren­cies with the decen­tral­ized mod­el of cryptocurrency.

Even those who are only vague­ly famil­iar with the cryp­tocur­ren­cy indus­try know of the apoc­a­lyp­tic col­lapse of LUNA and UST in May 2022. This col­lapse was cru­cial in insti­gat­ing the cryp­tocur­ren­cy cri­sis thereafter. 

LUNA was one of the market’s top per­form­ers once, with the alt­coin once among the top 10 cryp­tocur­ren­cies by mar­ket val­ue towards the end of 2021.

A Bloomberg report from May 2022 sheds light on the fur­ther devel­op­ments that tran­spired. It was in ear­ly May 2022 that the Ter­ra sys­tem col­lapsed as large investors began sell­ing their tokens. The move caused a huge drop in the price of the coins. While the price of UST fell to $0.10, LUNA’s price fell to almost zilch.

The cryp­tocur­ren­cy mar­ket lost around $45 bil­lion with­in a week in the ensu­ing blood­bath, lead­ing to a glob­al crash in the mar­ket. The lead­er­ship of the Ter­ra sys­tem hoped to buy Bit­coin reserves to buy more UST and LUNA coins so that their prices can be sta­bi­lized, but the plan didn’t work.

Thou­sands of investors across the globe lost sig­nif­i­cant amounts due to the mishap. In the imme­di­ate after­math, the Kore­an Nation­al Tax Ser­vice imposed $78.4 mil­lion in cor­po­rate and income tax on Do Kwon and Ter­raform Labs after a Ter­ra investor filed a police com­plaint against the co-founder.   

In fact, an affect­ed investor even broke into Kwon’s house in South Korea. His wife then sought secu­ri­ty from the police. 

In July 2022, News1 Korea report­ed that South Kore­an pros­e­cu­tors raid­ed 15 firms, includ­ing sev­en cryp­tocur­ren­cy exchanges in rela­tion to the inves­ti­ga­tion around the Ter­raform col­lapse. More than 100 peo­ple who filed com­plaints with the pros­e­cu­tors’ office report­ed­ly had loss­es total­ing rough­ly $8 million.

Only a few days back, Finan­cial Times report­ed that South Kore­an pros­e­cu­tors have report­ed­ly asked Inter­pol to issue a Red Notice against Kwon. Kwon, how­ev­er, tweet­ed that he is not on the run from any inter­est­ed gov­ern­ment agency. He added that the com­pa­ny is in full coop­er­a­tion and it doesn’t have any­thing to hide. 

Many from the indus­try had been warn­ing the cryp­tocur­ren­cy com­mu­ni­ty about the upcom­ing doom. Kevin Zhou, CEO of Galois Cap­i­tal, was one such indi­vid­ual. He said that the result was inevitable as the “mech­a­nism was flawed, and it didn’t play out as expect­ed” How­ev­er, most peo­ple didn’t pay any heed. 

On May 25, Bloomberg report­ed that a new ver­sion of LUNA was launched fol­low­ing a hard fork, with the new LUNA coin no longer asso­ci­at­ed with the deval­ued UST coin. The old­er cur­ren­cy is called Luna Clas­sic (LUNC) and the new­er one is called Luna 2.0 (LUNA). Though the old­er cryp­tocur­ren­cy has not been entire­ly replaced, its com­mu­ni­ty might slow­ly dis­solve as more and more users move to LUNA 2.0.  

The new ini­tia­tive includ­ed an air­drop of new LUNA tokens to those who held Luna Clas­sic (LUNC) and UST tokens and suf­fered. A sig­nif­i­cant por­tion of the mint­ed cur­ren­cy is to be reserved for devel­op­ment and min­ing oper­a­tions. Cur­rent­ly, there is a sup­ply of 1 bil­lion LUNA tokens.

Recent­ly, the 1.2% tax burn pro­pos­al, dubbed pro­pos­al #4661, passed the gov­er­nance vote, as con­firmed in a tweet by pro­pos­al author Edward Kim. The move was con­firmed by Ter­ra Rebels who tweet­ed that out of 96% cast votes, 99% favored the 1.2% tax burns.

The col­lapse of the twin coins proved to be a har­bin­ger of increased gov­ern­ment reg­u­la­tions, if not down­right oppo­si­tion, in the cryp­tocur­ren­cy indus­try. The anony­mous mod­el of the indus­try, much tout­ed to be the foun­da­tion of the decen­tral­ized cryp­tocur­ren­cy mar­ket, was once embraced by all. How­ev­er, the moment peo­ple lost their invest­ments, they rushed to gov­ern­ment author­i­ties for redressal. 

This is when gov­ern­ment finan­cial author­i­ties found the oppor­tu­ni­ty to push for imple­ment­ing rules and reg­u­la­tions in the cryp­to indus­try to tack­le price volatil­i­ty, mon­ey laun­der­ing etc. 

The entry of cor­po­rate insti­tu­tions with gov­ern­ment over­sight into the indus­try had already set the tone for what was to come. But this col­lapse fur­thered this trend. Now, cryp­tocur­ren­cy enti­ties, whether large or small, will like­ly be over­seen by cen­tral banks across the globe. In such sce­nar­ios, it will be crit­i­cal to observe how the indus­try man­ages to uphold its anony­mous and decen­tral­ized nature. 

A recent Bloomberg report says that upcom­ing leg­is­la­tion would ban algo­rith­mic sta­ble­coins such as Ter­raUSD the col­lapse of which led to a glob­al cryp­to crash. The said bill is cur­rent­ly being draft­ed in the U.S. House. The bill would make it ille­gal to devel­op or issue new “endoge­nous­ly col­lat­er­al­ized stablecoins.” 

In a recent inter­view, Kwon said that his con­fi­dence at that time was jus­ti­fied as the mar­ket suc­cess of his Ter­ra ecosys­tem was inch­ing close to $100 bil­lion, but his faith now “seems super irra­tional.” He admit­ted the pos­si­bil­i­ty of a mole being there in the orga­ni­za­tion, but added, “I, and I alone, am respon­si­ble for any weak­ness­es that could have been pre­sent­ed for a short sell­er to start to take profit.”

Why these projections matter

The future of LUNA is a very crit­i­cal mat­ter for the entire cryp­tocur­ren­cy indus­try. Launched as a part of the regen­er­a­tion strat­e­gy, its per­for­mance so far has not exact­ly been celebratory.

Trans­ac­tions on the Ter­ra 2.0 blockchain are val­i­dat­ed through the proof-of-stake (PoS) con­sen­sus mech­a­nism. The net­work has 130 val­ida­tors work­ing at a giv­en point of time. As a PoS plat­form, the pow­er of the val­ida­tor is linked to the num­ber of tokens staked.

How LUNA trades will deter­mine the course of not only this par­tic­u­lar cryp­tocur­ren­cy, but a num­ber of sta­ble­coins in the mar­ket. If it suc­ceeds in gain­ing the trust of investors, the ven­ture will go a long way in fur­ther­ing the cause of the asset class of stablecoins. 

In this arti­cle, we will lay down the key per­for­mance met­rics of LUNA such as its price and mar­ket cap­i­tal­iza­tion. We will then sum­ma­rize what the most promi­nent cryp­to-influ­encers and ana­lysts have to say about LUNA’s per­for­mance, along with its Fear & Greed Index. We will also briefly talk about whether you should invest in sta­ble­coin or not.

LUNA’s price, volume, and everything in between

Begin­ning its jour­ney at around $19 on 28 May 2022, LUNA quick­ly dropped below $5 the next day. By the end of May 2022, its val­ue was just above $11, but it soon spi­raled south as June began.

Over the next few months, the val­ue of LUNA kept oscil­lat­ing between $1.7 and $2.5. At press time, it was trad­ing at $1.48.

Source: LUNA/USDT, TradingView

Here, it’s worth not­ing that back in June 2022, its mar­ket cap was over $300 mil­lion, but it kept oscil­lat­ing between $210 and $300 mil­lion dur­ing much of July. Right now, the mar­ket cap is still with­in that range. 

The cri­sis that unfold­ed fol­low­ing the col­lapse of the twin coins impact­ed the course of the entire mar­ket. LUNA has been par­tic­u­lar­ly vul­ner­a­ble to volatile mar­ket con­di­tions. The Rus­sia-Ukraine cri­sis and increas­ing cryp­to-reg­u­la­tions across the globe have also cur­tailed the move­ment of the market. 

LUNA’s 2025 Predictions

Before read­ing fur­ther, read­ers should under­stand that the mar­ket pre­dic­tion of dif­fer­ent cryp­tocur­ren­cy ana­lysts can wide­ly vary. And, a good num­ber of times, these pre­dic­tions have been proven wrong. Dif­fer­ent ana­lysts choose dif­fer­ent sets of para­me­ters to arrive at their fore­casts. Also, nobody can fore­see unpre­dictable socio-polit­i­cal events that ulti­mate­ly end up affect­ing the market. 

Let us now have a look at what dif­fer­ent ana­lysts have to say about the future of LUNA in 2025.

A Changel­ly blog post claimed that experts, after ana­lyz­ing the pre­vi­ous per­for­mance of Ter­ra, have pre­dict­ed that the price of LUNA will oscil­late between $7.26 and $8.62. Its aver­age trad­ing cost dur­ing the said year will be around $7.46, with a poten­tial ROI of 384%, they added.

Tel­egaon too is very bull­ish in its assess­ment of the future of LUNA, with its max­i­mum and min­i­mum prices in 2025 being $52.39 and $69.18. It pre­dicts its aver­age price in the said year to be $61.72.

LUNA’s 2030 Predictions

The afore­men­tioned Changel­ly blog post stat­ed that the max­i­mum and min­i­mum prices of LUNA in 2030 will be $48.54 and $57.68. The aver­age price of LUNA in the said year will be $50.24, with a poten­tial ROI of 3,140%.

Disclaimer

Now, the afore­men­tioned are more recent pre­dic­tions. Before the events of the last few months, ana­lysts were way more opti­mistic about the for­tunes of LUNA.

Con­sid­er Finder’s pan­el of experts, for instance. In fact, they fore­cast­ed a price of $390 by 2025 and $997 by 2030.

“The likes of Dig­i­tal Cap­i­tal Management’s Ben Ritchie claimed, The LUNA token will con­tin­ue to gain trac­tion as long as there are no clear reg­u­la­tions in sta­ble­coins. We believe that LUNA and UST will have an advan­tage and be adopt­ed as a major sta­ble­coin across the cryp­to space. LUNA is burnt to mint a UST, so if the adop­tion of UST grows, the LUNA will ben­e­fit great­ly. Hav­ing Bit­coin as a reserve asset is a great deci­sion by the Ter­ra governance.”

There were con­trary opin­ions too. Accord­ing to Dim­itrios Salampasis,

“Algo­rith­mic sta­ble­coins are con­sid­ered as being inher­ent­ly frag­ile and are not sta­ble at all. In my opin­ion, LUNA will be exist­ing in a state of per­pet­u­al vulnerability.”

That’s not all. In fact, at one point of time, there was also talk of Ter­ra emerg­ing as the most staked asset.

Source: Find­er

Fear & Greed Index 

As the legal trou­bles for the Ter­ra founders do not sub­side, there does not seem to be many pos­si­bil­i­ties of investors trust­ing the alt­coin. Many exchanges con­tin­ue to put warn­ing tags along the list­ing of LUNA and investors remain high­ly cau­tious. How­ev­er, at press the fear and greed index for the cryp­to mar­ket stood in the ‘Greed’ category.

Source: Alternative.me

We will also have to see how the com­mu­ni­ty of LUNA devel­op­ers and investors acts in the next few weeks. If they burn enough tokens so as to dri­ve up its price, it can prove to be ben­e­fi­cial for its future. A sus­tained effort on the part of the cryp­tocur­ren­cy indus­try, in par­tic­u­lar the LUNA com­mu­ni­ty, can go a long way in restor­ing the trust of investors in the market. 

In an inter­view with Lau­ra Shin on the “Unchained” pod­cast, Kwon said that he moved to Sin­ga­pore from South Korea before the col­lapse of the Ter­ra ecosys­tem. So, it should not be assumed that he ran away to escape the author­i­ties. He denied claims that he is on the run from law enforcement. 

Kwon said, “What­ev­er issues exist­ed in Terra’s design, its weak­ness [in respond­ing] to the cru­el­ty of the mar­kets, it’s my respon­si­bil­i­ty and my respon­si­bil­i­ty alone.”

Recent news has now emerged that Kwon is also fac­ing a class-action law­suit filed on behalf of more than 350 inter­na­tion­al investors in a Sin­ga­pore­an court. They claim to have lost about $57 mil­lion in the col­lapse of the algo­rith­mic sta­ble­coin Ter­raUSD (UST) and its ecosystem

Well, last month, the New York Times inter­viewed Ethereum co-founder Vita­lik Buterin who claimed that the Ter­ra Luna team attempt­ed to manip­u­late the mar­ket in order to prop up the val­ue of the native cryp­tocur­ren­cy. He also recalled that plen­ty of “smart peo­ple” were say­ing that Ter­ra was “fun­da­men­tal­ly bad.”

As a mas­sive mar­ket slump due to the FTX deba­cle is going on, we are wit­ness­ing mas­sive with­drawals. LUNA remains among the worst-hit tokens in this ongo­ing cri­sis. It has fall­en by around 30% over the last 2–3 days. The same has been made worse by Silvergate’s liq­uid­i­ty cri­sis and the crypto-market’s response to the same. 

We are wit­ness­ing the sec­ond crash in the cryp­to mar­ket this year fol­low­ing the FTX deba­cle. As the pri­ma­ry token respon­si­ble for the first crash in May, LUNA has been among the worst-hit tokens in the sec­ond crash too. Its price has fall­en by 35% since FTX filed for bankruptcy.

Fol­low­ing FTX’s col­lapse, we are wit­ness­ing the glob­al cryp­to market’s sec­ond crash this year. LUNA was the pri­ma­ry token respon­si­ble for the first crash in May, and it was also one of the tokens that suf­fered the most dam­age in the sec­ond crash. Its val­ue has dropped by 30% since FTX declared bank­rupt­cy, but it appears to be recovering.

As per a local media report from South Korea, pros­e­cu­tors are freez­ing assets worth $92 mil­lion affil­i­at­ed with Ter­ra tokens as per the orders of a Seoul South­ern Dis­trict Court. The seized assets were tak­en from Ker­nel Labs, a tech firm close­ly relat­ed to Ter­raform Labs. It has been revealed that Ker­nel Labs CEO Kim Hyun-Joong served as Vice Pres­i­dent of Engi­neer­ing at Ter­raform Labs.

Fur­ther­more, the Ter­ra Clas­sic com­mu­ni­ty has decid­ed to sup­port two sig­nif­i­cant pro­pos­als in the com­ing days that will have an impact on the burn rate and financ­ing for the com­mu­ni­ty pool.

In addi­tion, there have been a num­ber of pos­i­tive devel­op­ments in the cryp­tocur­ren­cy sec­tor, such as Dubai estab­lish­ing fed­er­al leg­is­la­tion and FTX retriev­ing client funds, both of which are viewed as key dri­vers sup­port­ing cryp­tocur­ren­cies such as Ter­ra Luna Classic.

Ter­ra Clas­sic core devel­op­er Edward Kim warned the com­mu­ni­ty that the pro­pos­als could severe­ly impact fund­ing for the com­mu­ni­ty pool as data shared in the pro­pos­al has a miscalculation.

1/ Regard­ing prop 11242/11243, dfunk (author of the pro­pos­al) and I spent some time yes­ter­day doing some chain analy­sis, and I think we par­tial­ly fig­ured out why esti­mates of gas con­tri­bu­tions were *13x low­er* than the actu­al amount going into the com­mu­ni­ty pool

— Edward Kim (@edk208) Jan­u­ary 8, 2023

Sin­ga­pore­an author­i­ties have launched a probe into Do Kwon’s Ter­raform Labs, as per a recent Bloomberg report. Sin­ga­pore­an police sent an emailed state­ment announc­ing that “inves­ti­ga­tions have com­menced in rela­tion to Ter­raform Labs.” It added that the inquiries are “ongo­ing,” and Kwon is not cur­rent­ly in the city-state.

The announce­ment comes less than a month after the US Secu­ri­ties and Exchange Com­mis­sion (SEC) sued Ter­ra founder Do Kwon and his orga­ni­za­tion Ter­raform Labs for secu­ri­ties fraud. 

We must again reit­er­ate that mar­ket fore­casts aren’t set in stone and can go wild­ly wrong, par­tic­u­lar­ly in a mar­ket as volatile as that of cryp­tocur­ren­cies. Investors should there­fore take due cau­tion before invest­ing in LUNA.