<h2>LUNA UST Collapse Explained</h2>
<h3>This Is A Major Event In The Crypto Market</h3>
Max Maher provides a good presentation on what happened, and is happening with LUNA UST.

Was this triggered by Blackrock and Citadel ???

<img src="https://cryptogrizz.com/wp-content/uploads/2022/05/CRYPTO-CRASH.jpeg" alt="LUNA UST Collapse Explained" width="289" height="175" />
https://youtu.be/zLkXJeWFWr0
<h2>LUNA UST Collapse | The Truth</h2>
150,167 viewsMay 11, 2022

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<a dir="auto" spellcheck="false" href="https://www.youtube.com/channel/UCLr9nHPNpj7U3096nEo8Qfg">Max Maher</a>

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<section data-id="270bc4c" data-element_type="section">
<h3><b>PRIMEXBT</b></h3>
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<h3 id="title-text"><strong>LUNA UST Collapse Explained</strong></h3>
</section><section data-id="f9b1863" data-element_type="section">BROUGHT TO YOU BY:

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<img src="https://cryptogrizz.com/wp-content/uploads/2021/10/Crypto-Grizz_adobespark-300x300.png" sizes="(max-width: 300px) 100vw, 300px" srcset="https://cryptogrizz.com/wp-content/uploads/2021/10/Crypto-Grizz_adobespark-300x300.png 300w, https://cryptogrizz.com/wp-content/uploads/2021/10/Crypto-Grizz_adobespark-150x150.png 150w, https://cryptogrizz.com/wp-content/uploads/2021/10/Crypto-Grizz_adobespark-120x120.png 120w, https://cryptogrizz.com/wp-content/uploads/2021/10/Crypto-Grizz_adobespark.png 500w" alt="LUNA UST Collapse Explained" width="300" height="300" data-srcset="https://cryptogrizz.com/wp-content/uploads/2021/10/Crypto-Grizz_adobespark-300x300.png 300w, https://cryptogrizz.com/wp-content/uploads/2021/10/Crypto-Grizz_adobespark-150x150.png 150w, https://cryptogrizz.com/wp-content/uploads/2021/10/Crypto-Grizz_adobespark-120x120.png 120w, https://cryptogrizz.com/wp-content/uploads/2021/10/Crypto-Grizz_adobespark.png 500w" data-src="https://cryptogrizz.com/wp-content/uploads/2021/10/Crypto-Grizz_adobespark-300x300.png" data-sizes="(max-width: 300px) 100vw, 300px" />
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</section>
<h3><strong>FULL VIDEO TRANSCRIPT</strong></h3>
0:00i've slept about five hours in the last0:01two days and0:02haven't showered so apologize for that0:04but i felt the need to talk about luna0:06and especially the ust collapse what0:08happened how i personally incurred crazy0:11losses and the rumors swirling around0:13that this is some kind of intentional0:15market manipulation and also i have an0:17announcement to make at the end of this0:18video so stick around0:20uh the this event0:22has ruined0:24tons of people's lives and0:26undoubtedly hurt the entire crypto0:28market and you'll see what i mean in a0:30minute0:32i i really don't even want to be0:34recording this video so let me just give0:36you let me just give you the the0:37essentials first so ust it's a stable0:40coin it's supposed to be pegged to the0:41u.s dollar0:42this happens through arbitrage trading0:44where investors essentially trade ust0:47for luna or vice versa to keep that0:49price right at one dollar now typically0:51this works it's had a few slip ups in0:53the past but nothing it hasn't recovered0:55from0:56every time there's been a slip up it's0:57been because you know the market tanks1:00or something like that but these things1:02are made to withhold market events so1:04typically it's fine well1:06as you're aware i'm sure ust is now1:09trading at far less than a dollar around1:1150 cents at the time of this recording1:13and it's been as low as 29 cents now the1:16worst part is that people buy and invest1:19in ust and other stable coins as a bit1:21of a shelter from volatility and risk1:23you park your money there when you're1:25trying to be safe like that's supposed1:27to be1:28the safe option1:29the best way to visualize this is like1:31extreme inflation which real inflation1:34is pretty bad today also but inflation1:36that doubles overnight so coffee was1:38three dollars yesterday well it's six1:40dollars today and there's a chance it1:41could be twelve dollars tomorrow this is1:43essentially what happened to every1:45single ust holder and there's millions1:47of holders this is this is huge so what1:50caused all this1:51well at the beginning of the month uh1:52anchor protocol which1:55was the most popular lending platform on1:57the planet switched their rate structure2:00here you could lend out the ust2:02stablecoin token for around 20 apy crazy2:05rates the problem is that this was more2:07of an introductory rate to get people in2:09and you know build up excitement around2:11this ecosystem rates would be lowered2:13later2:14they were burning a ton of cash and this2:16couldn't go on forever which is totally2:18fine if cash ran out rates would just2:20drop but your deposit would would have2:22no issues whatsoever well the beginning2:24of may2:26a new rate structure was enacted that2:28would make rates more variable depending2:30on demand within that protocol rates2:33were expected to lower by about 1.52:35percent per month for a few months until2:37that stability was found and then they2:38weren't burning so much cash so this2:40started and the expectation was that2:43people who had money deposited on this2:45anchor protocol earning interest would2:47leave some people would and and the2:50exchange would be spending2:52less money well the opposite happened2:54deposits hit a record high in early may2:57after that switch to around 18 billion2:59dollars but again this wasn't the end of3:01the world i personally kept an eye on it3:03but i wasn't exactly worried about this3:06because again the money runs out it's3:07fine however we're in a touchy market3:09right now stocks are going down cryptos3:11everything there's a ton of fear on3:13everything everything having to do with3:15investing people in the general market3:17began to sell cryptos including the one3:20that backs ust luna the decrease in3:23luna's price caused investors to be3:25concerned about its ability to back the3:28value of this now massive ust token it's3:31a top 10 token now some investors began3:34selling their ust and this caused a ton3:37of downward pressure on ust because3:39algorithmic it can go down in value this3:42took it off of that one dollar peg so it3:43went from one dollar and around may 7 to3:46around 99 cents3:47again this wasn't the end of the world3:49stable coins fluctuate even usdt3:51fluctuates a little bit just recently3:53ust was trading at a dollar a one no one3:56battered i it was totally fine so things3:59were a little bit touchy but so was the4:01entire market so this didn't seem like4:03that big of an issue really that is4:05until monday when the fed announced the4:07interest rate hike and this caused4:09stocks and cryptos to tumble4:11dramatically and almost instantly people4:12worried about further losses in the4:14market began selling including the luna4:16token and ust so this caused a kind of4:19negative flywheel where luna's price4:22decreases further and remember luna is4:24backing ust so people get even more4:26worried that the value behind this4:27stable coin is crumbling this means even4:29more sell-offs happening and you can see4:31this kind of negative effect happens4:33because of these sell-offs ust falls4:35further4:36off of its one dollar peg selling off4:38more and more because now people are4:39freaking out you know it hits 98 cents4:40people like i'm done with this you can4:42see that negative effect compounding and4:44we can see the market cap of ust4:46dropping dramatically right at this time4:48this is where prices begin to absolutely4:50free fall and i'm not going to lie4:52this was4:54a very panic inducing time i saw this4:56happen live i was on the chart for luna4:59and ust i saw luna live dropped by 505:02and what felt like minutes i watched the5:03price for ust which is supposed to be a5:05dollar drop down to 80 cents and then 705:08and then 60. and there's nothing i could5:11do about my deposits at this point the5:12network was congested by the time i5:14could get any money onto an exchange5:16this thing could hit zero evaporating my5:19account anyone who was using leverage5:21was very likely liquidated especially by5:23this point if you had even 10 leverage5:25it's not looking good and that's a lot5:28of people but what's especially5:29frustrating for me5:31before i ever bought a single dollar of5:34ust personally i did an insane amount of5:36diligence to determine if this risk5:39reward made sense i understood the5:41tokenomics and the key risk factors i'm5:43diversified i even chatted with three5:45different crypto lending hedge funds to5:47look at their risk analysis to like see5:49if this actually makes sense for me i5:52really like to do the research before i5:54buy anything the consensus seemed to be5:55that ust would be totally fine as long5:58as luna doesn't drop more than about6:00like 70 which seemed like a reasonable6:02margin to er margin of error to me well6:05guess what happens luna dropped 706:06percent and then some surprisingly it6:08didn't go to zero the first night but i6:11was still looking at larger losses than6:13i've personally ever seen before this6:14was money i'd sitting on the sidelines6:16waiting for good deals while the market6:17was just being crazy i was trying to be6:19relatively safe with it so i keep my6:22money in not wanting to you know be the6:23guy who sells a dollar for 50 cents6:25because you know that sounds ridiculous6:27who would do that6:29and uh and i know that's perfectly6:30possible for the price to go back up to6:32one dollar i mean with an understanding6:34of how this price goes back to a dollar6:36i even decided to try some arbitrage i6:38should be able to essentially buy ust6:40for 70 cents or whatever it's at and6:42then sell it to tara for a dollar in6:44instant 30 profit whatever that6:46difference might be6:47this was a major problem though because6:50they have a safety mechanism that makes6:51it less profitable to do arbitrage the6:54more that it's being done so it creates6:56this kind of like cool down period6:57within the system now in normal times6:59this is pretty useful but right now this7:03means my one dollar tokens are stuck at7:05far less than one dollar for the7:07foreseeable future7:09meanwhile the backing luna is getting7:11pummeled increasing the risk more and7:13more as the price of luna goes down this7:15risk goes up plus that cooldown period7:17just isn't happening fast enough this is7:19insanely bad like the crypto version of7:22the housing bubble7:23so the next day comes and i know that7:26we're completely walking on eggshells7:28here if the crypto market drops further7:30we're screwed absolutely a total bank7:32run but if we can be calm prices will go7:35back up to a dollar maybe in a few days7:37maybe a week at most so i monitor the7:39market and sell a little bit at like 907:41cents but things seem to be healing up7:44so the plan was just to hang tight just7:46a little while longer just see where7:48things trend7:49that was a mistake7:50late on the 10th7:52prices began to tank further and further7:55hitting eventually around 20 cents for7:57ust a dollar now worth 20 cents so8:01thankfully i didn't panic sell during8:04that time8:05but i do have sales around 50 cents on a8:08dollar they would do that i guess me8:11by far the most painful sales of my8:13entire life so not only am i part of one8:16of the worst events black swan events to8:19happen in crypto but now i'm thinking8:21about how i i feel obligated to be8:23transparent and talk about it like8:25someone has to talk about these events8:27and you know thinking about this8:30if i bought a volatile asset and it8:31dropped 50 percent sure i'd be salty8:34about it but i think to myself like well8:36you know that's the risk you take buying8:38a volatile asset but when you buy8:39something that's supposed to be the safe8:42bet you know reasonably safe anyways8:44it's not perfectly safe you just feel8:46betrayed when it drops and i'm sure8:48there's a lot of people who kind of feel8:49the same way as i do about this you feel8:51dumb you think that you could have done8:53something different you think you should8:54have done something different8:55but the more i think about it i really8:57don't think anyone who lost on ust9:00should feel like they did especially9:02anything like9:03that wrong i mean this is the definition9:06of a black swan event this is the lehman9:07brothers collapse of crypto9:09it's not just degenerates who were part9:12of this it's not a hundred thousand9:13percent apy yes it's high if you don't9:15get me wrong like it's a hint of9:17degenerate for sure but we're talking9:19hedge funds we're in this retirement9:21savings there was a lot of smart people9:23who would invest in this who got9:24absolutely smashed9:26every single person invested9:28just didn't properly calculate risk9:30myself included and that's the mistake9:32that we made and for those saying you9:34know9:35this is 20 it's unsustainable what do9:37you expect you're absolutely right but9:39so are lending rates on literally every9:42single crypto platform every exchange9:44that pays eight to twelve percent flat9:46interest on stable coins is losing money9:48in order to get people in the door this9:50is no different no one would expect an9:5318 billion dollars to just essentially9:55evaporate in two days and that's what9:57happened now i'm going to talk about9:59uh the few what the future may hold here10:01but first i want to talk about the10:02rumors that this may be a coordinated10:04attack now we don't have proof on this10:07but i think it's important to understand10:10what's being said anyways so marketing10:12conditions market conditions absolutely10:14amplified this entire issue but there10:16are rumors that it might have been10:17spurred by blackrock and citadel they10:19borrowed a hundred thousand bitcoin from10:21gemini and the story goes that they then10:23swapped 25 percent of that into ust they10:26then reached out to do quan the founder10:28of tara saying that they wanted to buy a10:29large chunk of ust and would sell10:32bitcoin at a discount in order to do so10:35and they wanted to do it directly so10:36they didn't hurt ust too much supposedly10:39he took the bait lowering the supply of10:41available ust again this has not been10:43confirmed blackrock in citadel then sold10:46all the bitcoin and ust that they held10:48causing both markets to fall sharply at10:50the same time10:51creating this panic or at least10:53amplifying a panic that was happening10:55once price decreased they then buy back10:57their bitcoin that they loaned out at a10:59lower price and make a tidy profit on11:01the loan11:02now the unfortunate thing11:04is that if this is true it's totally11:06legal they were simply exploiting a11:07market that had a major weakness it's11:10extremely unfortunate but11:12it's a weak market and like there's not11:14much you can say or do11:16some people did call that this could11:18happen11:19and i even did to a certain degree but11:21we shouldn't be too hard on ourselves11:23because if you look hard enough you will11:25literally find a prediction for anything11:27so11:28so what now11:29there's two major concerns that i want11:31to point out and then my announcement11:33tara is voting to tweak the algorithm of11:35ust to get the one dollar peg algorithm11:38to work faster getting the price back to11:40normal sooner this is good but the issue11:43here is that will be at the expense of11:45luna it will cause a lot of downwards11:46pressure and11:48even given this change i foresee a ton11:52of volatility in ust before it gets11:54fixed if it can even get fixed the11:56stress is not over if you still hold ust11:59in my opinion none of this is financial12:01advice of course12:02now second12:03this is extremely bad for the entire12:06crypto market both crypto lending and12:08stable coins have had a close eye12:11from regulators for the last year or so12:13i'm willing to bet that this is the nail12:15in the coffin for both this event is12:18exactly why markets get regulated look12:20at the bank runs of 1907.12:22black wednesday the 08 crisis all of12:25these things people have their fun they12:27make their money markets get hot and12:29eventually the music stops then12:30regulators need to come in and try to12:33prevent it from happening again but then12:34there always will be a new market that12:35crops up and the exact same thing12:37happens12:38and we saw this coming i highly12:40recommend watching my last two videos12:42after this one is about governments12:43attempting to replace bitcoin and stable12:45coins and the reasons to do so and the12:46other is about how the anchor protocol12:48is dying off like i couldn't have i12:50didn't plan it but like those two videos12:53somehow landed perfectly12:55unfortunately the only thing that we can12:57do now is learn from this so personally12:59i've learned that i'll diversify even13:01further i thought an eight percent13:02allocation of this13:04was you know risk i was willing to take13:06and i learned that even that can be too13:08much now i did want to do something13:10because i know the community is hurting13:12like i am honestly um bitget and ftx13:15sponsor me so i'm going to give that13:16money to the community uh ftx is an13:19all-inclusive crypto brokerage who13:20allows you to buy a wide variety of13:23cryptos nfts with trading fees up to 8513:26percent cheaper than competitors they're13:27an awesome service i've been buying up13:29bitcoin recently in this dip and it's13:31come in huge it's come in handy uh13:34saving on all those fees so if you grab13:36the link in the description you'll get13:37an additional 10 off for life plus13:39you'll be supporting this channel so13:40sign up and try them out now the13:42giveaway i'm going to be giving away 50013:45every day for the next seven days on my13:47discord it's totally free all you have13:48to do is join and react on the post in13:50order to be entered13:52uh i just13:53that's all i can really do at this point13:55it's a sad it's a sad day for crypto and13:58we just need to stick together so thanks14:00everyoneEnglish (auto-generated)