Why Crypto Cratered

Over the last few days, the cryptocurrency world has faced an intense shakeup due to the precipitous drops of a stablecoin called TerraUSD and its sister currency Terra Luna. The crash has rattled the broader crypto market, and other tokens including bitcoin and tether have also struggled. Terra Luna is now almost worthless. In the last week alone, bitcoin dropped about 25%; it's dropped more than 50% in the last six months. Some have compared the crash to the 2008 financial collapse.

Once aggressively bullish crypto investors are panicking. Some have pumped the brakes. Others have been devastated; Reddit on Thursday began offering support and resources to crypto holders discussing suicide in its forums. One person said their friend attempted suicide over the crash. “Do not be alone, this shit is getting serious,” the person wrote.

The crypto market’s nosedive over the past few days illustrates the high stakes that can accompany a nascent financial system, which has largely been left unregulated. But what actually happened? How will this affect the rest of the crypto ecosystem? What the hell is Terra, and why does it have a sister currency called Luna? Here’s what you should know.