The controversial stablecoin to which cryptocurrency luna is tied has lost its peg, making it nearly useless.

Luna's value, the cryptocurrency closely related to the controversial stablecoin TerraUSD, has dropped to almost $0. This is because the price of the so-called stablecoin fell sharply below the $1 mark. To keep the dollar peg intact, a UST token is produced by erasing a certain quantity of the associated cryptocurrency, Luna. The Luna Foundation Guard acts as a form of reserve by keeping bitcoin in their possession. The organization may have to liquidate some or all of its bitcoin holdings to maintain the peg.

On Thursday, Bitcoin's price traded at its lowest level since December 2020. Tether, the largest stablecoin globally, also fell below its $1 peg.

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