On the anniversary of the LUNA collapse that shook the cryptocurrency market, Binance CEO Changpeng Zhao (CZ) said that it should be removed from the event that caused the $ 40 billion depreciation and the significant drop of Bitcoin.
Binance CEO Changpeng Zhao (CZ) Addresses LUNA Collapse
CZ tweeted this morning featuring Bitcoin's price action history:
A year ago today UST/LUNA crashed. It lost $40 billion in value. BTC fell from 28,000 to 19k. “A few lessons can be learned,” he 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. pic.twitter.com/h0Hyj5elx6
— CZ 🔶 Binance (@cz_binance) May 11, 2023
Even though the LUNA collapse happened a year ago, the lessons learned from it are still relevant today. After the crash, CZ pressed for transparency and user protection.
He stated that Binance will allow the Terra project team to compensate individual users first, while Binance will be compensated last.
This reflects the industry's current efforts to increase liquidity and protect users from losses.
The collapse of LUNA and TerraUSD (UST) not only lost $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 to be strategic and disciplined in one's approach to investing.
One way to reduce the risks of such collapses is to increase liquidity in the market. This is a difficult task, especially in the face of increased regulatory oversight, but efforts are ongoing.
The DeFi industry, for example, is exploring ways to create more stablecoins backed by a range of assets, not just the US dollar.
As the industry grapples with liquidity, interoperability and user protection, the lessons learned from the LUNA crash are still relevant today.
The LUNA collapse shocked the industry, and CZ's thoughts offer insights into the importance of responsible leadership in the crypto world.
*Not investment advice.