The chief investment officer of Bitwise Asset management firm explained how it can be risky to buy and hold Luna coins.
Terra is a blockchain protocol and this is a popular crypto project in the crypto industry, which is currently holding its potential at 8th position with a total market cap of 2.4 dollars billion over the last 24-hour volume. Crypto experts see this coin as the best asset to hold in the long term.
A discussion on Terra (LUNA) took place between two experts in this blockchain industry. These two experts were CNBC’s Taylor Locke, Matt Hougan, chief investment officer at Bitwise Asset Management. These two experts noted that there are associated risks with the LUNA despite the huge gain and better use cases of this blockchain project.
Experts asserted that first of all there is a precise need to keep the Stablecoin UST fully 1:1 pegged with the US dollar because UST and LUNA both are part of the same Ecosystem and negative impact on a single asset will impact another one automatically.
Experts noted that if any regulatory issue will rise with UST, then surely it will result in a big problem for those who are LUNA investors. However, there are no questions against the stablecoin of Terra but in the present time, regulators are focused on the stablecoins industry.
Second thing, that these two experts noted the Investigation of The US Securities and Exchange Commission (SEC) on Terra, about its involvement with the Mirror Protocol.
US regulators want to figure out whether Terra is related or linked with Mirror Protocol or not. And also the SEC agency filed an action against the Terra company, whether they are selling unregistered securities or not.
Through these two factors, two experts claimed that Terra may face problems like the Ripple firm.