Crypto Traders Must Watch: The Epic Market Crash of the "Maotai" of the Crypto World, a Hundred Billion Market Cap Vanishing in One Day!

In 2022, Do Kwon was undeniably a god in the crypto circle.

In his early thirties, arrogant and unrestrained, he single-handedly created LUNA and UST, building a $40 billion crypto empire that was revered by countless retail investors. His UST, with high returns, became the "wealth safe" for many people's life savings, and everyone believed it was an unbreakable myth that would never collapse.
But this empire had a fatal flaw from the very beginning.

UST is not a stablecoin backed by full reserves of real gold and silver; it relies entirely on algorithms to maintain the peg—1 UST equals 1 USD, freely redeemable and mintable. No reserves, only trust. Once confidence collapses, the foundation—UST—will be destroyed.

Wall Street bears saw through this critical weakness. They lurked in the shadows, pouring billions of dollars into short positions, not attacking LUNA but targeting UST’s survival.

Do Kwon refused to back down, gathering whales, exhausting the treasury, and launching a short squeeze. He frantically bought LUNA and burned UST, pushing the price from $80 to a historic peak of $119. Short sellers retreated, retail investors cheered loudly, and everyone thought victory was within reach.

But the crisis quietly erupted from the foundation.

The bears were the first to sell off UST, causing it to drop from its peg of $1 to $0.9.

As the core trust of the entire ecosystem, the de-pegging of UST instantly ignited extreme panic!

Retail investors frantically rushed to sell, all trying to convert UST into cash to escape. To stabilize the system, the protocol could only infinitely mint new LUNA to absorb the massive outflow of UST.

Massive amounts of LUNA flooded the market like a flood, with circulation skyrocketing to trillions overnight, crushing the market with selling pressure. The death spiral was complete: as UST collapsed, LUNA was printed more and more; as LUNA fell, UST panic intensified.

Do Kwon poured everything into defending the peg, but he couldn’t stop the collapsing confidence. He could push LUNA’s price higher but could no longer hold the shattered UST together.

72 hours of hell ensued.

LUNA plummeted from $119 to $0.0001, and UST became worthless, causing the empire to collapse instantly.

Wall Street bears reaped hundreds of billions, walking away unscathed, while Do Kwon’s throne fell, fleeing in panic; 800k retail investors lost all their hard-earned savings overnight, and the hundred-billion-dollar market cap vanished into thin air.

The most fragile thing in the world is never the coin price but human trust.