CNBC News has presented the potential advantages and disadvantages of Terra (Luna) that investors should consider and be wary of.
LUNA may be affected in terms of reliability from the UST peg (UST peg).
Speaking to CNBC’s Taylor Locke, Matt Hougan, chief investment officer at Bitwise Asset Management, identified two main risks associated with buying and holding Terra (LUNA), the main asset of the Terra platform.
1) Terra’s stablecoin UST pegs the US dollar at 1:1. Since the LUNA token is used in the UST engine, the performance of the two assets may affect each other.
2) Investors should also consider the regulatory issues surrounding stablecoins, with a CNBC speaker reporting that Terra’s company Terraform is currently being investigated by the US Securities and Exchange Commission (SEC), which is filing a review. Check if unregistered securities have been sold.
Terra and LUNA tokens are in the spotlight in Q4 2021, with LUNA recently surpassing $100 and making it into the top 10 assets by market capitalization.
Yesterday, Galaxy Digital CEO Mike Novogratz suggested CNBC replace Litecoin (LTC) with LUNA and SOL on the ticker board.
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