CNBC education platform CNBC Make It has published a lengthy explanatory text discussing the possible pros and cons of Terra (LUNA) that enthusiasts should consider when holding an altcoin.
“2 issues should be considered for the altcoin project”
In an interview with CNBC’s Taylor Locke, Bitwise Asset Management chief investment officer Matt Hougan identified the two main risk groups involved in acquiring and holding Terra (LUNA), the token of the Terra high-performance blockchain platform.
Terra is ‘currently popular with the cool kids’ as her icon LUNA hits an all-time high. Here’s what investors need to know.
First of all, Terra’s stablecoin UST should hold a 1:1 peg at the US dollar price. Since LUNA tokens are used in UST mechanisms, the performance of the two assets may affect each other. Next, regulatory issues regarding stablecoins should also be considered by potential investors. The speaker of CNBC, who warned about these issues, also reminded that Terra’s company, Terraform, is currently being investigated by the US Securities and Exchange Commission. The SEC investigation concerns Terraform’s ‘Mirror Protocol’, a platform for synthetic assets. The SEC sued Terraform to find out if Terraform was selling unregistered securities.
Terra and its token LUNA attract attention in the 4th quarter of 2021. Recently, LUNA broke $100 and entered the top 10 cryptocurrencies by market cap. As reported by Somanews, yesterday, Galaxy Digital CEO and veteran Bitcoin (BTC) advocate Mike Novogratz suggested on CNBC’s record board to replace Litecoin (LTC) with LUNA and SOL. Both platforms captivate billionaires with their community-focused events and the interest the dApp developers have shown in building on Terra and Solana.