The war in Ukraine has been going on for almost 3 months, during which millions of the country’s inhabitants lost their life savings or property.
Many Ukrainians, as well as residents of the Russian Federation, on which the West imposed sanctions, therefore tried to temporarily transfer their funds to “safe” assets at the very beginning of the conflict, which, according to them (in addition to foreign currencies such as the dollar or euro) included cryptocurrencies.
The unreliability of banks and financial institutions, before which long lines of people formed in Russia and Ukraine after the start of the war in an effort to withdraw their money, led to the crypt of ordinary citizens who no longer had the opportunity to buy, for example, US dollars.
One of them was the Ukrainian Yuri Popovich from Kiev, whose story was brought by the portal The Guardian.
From $ 10,000 to $ 500, the investment was supposed to be secure
In April, Yuri, fearing the collapse of the Ukrainian hryvnia, invested all his savings of about $ 10,000 in stablecoin (a cryptocurrency whose value is in some way tied to state currency or assets, editor’s note) TerraUSD. UST was the third largest stablecoinom and the largest so-called algorithmic stablecoinom.
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Its protocol was designed so that the value of the UST follows the value of the US dollar, through advanced algorithms and smart contracts that adjust the supply of issued tokens as needed without the need for reserves, similar to what central banks do.
In UST, the system also relied on traders who burned or created tokens at low profits, which kept UST’s price stable.
In Yuri’s case, then, it was not a profit-making investment, but an effort to keep his money stable at the dollar, and when the situation calmed down, he would take it back. However, he did not expect what happened to the externally stable cryptocurrency.
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Two weeks ago, after the collapse of the “parent” cryptomen of this stablecoin Terra (LUNA) the stablecoin UST itself collapsedwhich of the original value of 1 USD fell up to less than $ 7 ($ 0.07).
Similarly, Terra itself, whose value currently stands at just over $ 0.0001 out of the original $ 80 she earned earlier this month.
After the collapse of the once popular cryptocurrency, the aim of which was to keep stablecoins at a predetermined value, we also witnessed attempts to save it through the Luna Foundation Guard (LFG) and its founder. Do Kwonom. He tried protocol save accumulated reserveswhich, among other things, contained more than 80,000 bitcoins with a value of more than $ 3 billion at the time. However, this attempt did not end successfully, as we reported in this article.
Thus, Yuri, like millions of other retail investors, saw the value of their “stable” savings fall by more than 90%, and the last time he looked at his wallet, it was worth less than $ 500.
This slump has, of course, angered Terra investors and caused chaos in the entire cryptomen market, while stability concerns have begun to fall on several other large cryptocurrencies.
Recall that it was Terra, ie her token LUNA, whose value after the conflict in Ukraine significantly increased and many Ukrainians and Russians invested their money in it. However, the “golden times” also experienced during the last year, when its investors they could enjoy the profit more than 6,000%.
However, investment in cryptocurrencies between Ukrainians and Russians has increased across the board, according to the portal Coindesk In the first days of the war, trading volumes between the Russian ruble and bitcoin rose to a nine-month high, while trade on the Ukrainian cryptoburse Kuna increased trading according to data Coingecko on Thursday, February 24 by more than 200%.