Avalanche (AVAX) Crypto Dropped 30% in the last 24 hours
Today, the crypto market is buzzing over Terra's (LUNA) steep decline, and for a good reason.
Investors have fled LUNA and TerraUSD (UST) as their values have plunged over 90% and 70% to other stablecoins.
Although Terra's fall had an unintended effect on other projects, it has had a significant impact.
News about the Luna Foundation Guard's connection to Avalanche (AVAX) is hurting the cryptocurrency (LFG).
Terra's sidekick, Avalanche, isn't a friend. It's more of a rival than a rival.
This layer-1 app network, like Terra's, aims to be the ideal platform for decentralized exchange (DEX) trading and DeFi income-generating options, such as stake and liquidity farming.
Solana (SOL) and the two networks are part of a set of layer-1 protocols that exploded in popularity last fall.
In light of recent events, here are some things investors should know about AVAX.
What's going on with the AVAX cryptocurrency right now?
Because the two networks are rivals, AVAX should be on consumers' radars as they search for new possibilities. However, this isn't the case since Terra's devs are AVAX whales.
Once this year, the UST stablecoin lost its $1 peg due to a dispute with a DeFi platform.
As Terra's construction progressed, Luna Foundation Guard (LFG) initiated a $10 billion Bitcoin (BTC-USD) purchase binge.
The UST stablecoin relies on this stock of Bitcoin as a reserve. Prices of LUNA soared once the budget was announced.
The LFG purchased $100 million in AVAX to continue stockpiling assets in April. Today's problem for Avalanche revolves around this.
The LFG is investing 750 million BTC to stabilize UST while Terra continues to fall.
Investors are worried that the company may also dump its huge stockpile of AVAX cryptocurrency, causing prices to plummet.
AVAX is down 34% due to the incident, which is ironic given that the coin's value is being driven down by investor anxiety.
In addition, the network's market value has fallen by more than 30 percent as of this time.
