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Invest in Luna in 2022

Last updated 22nd Sep 2022
Disclosure

Luna is a blockchain protocol that combines the benefits of fiat currency stability with blockchain decentralization to provide international transactions. Its native token, LUNA, is pegged to its stable coin UST to manage inflation and deflation against supply and demand. Its founders are also deeply entrenched in the South East Asian and Korean corporate worlds which gives the project a sense of real utility and real world integration.

Luna has risen steadily since the end of 2021 with some harsh dumps around February falling from $80 to $50. It has reached over the $100 mark several times in the past 12 months now, but has struggled to sustain itself at those levels, with dumps following shortly after its spikes.

We will detail everything you need to know about trading Luna, including where to buy it, how to buy it and advise if now is the time to buy in.

Best Way to Invest in Luna in 2022

Luna is an extremely popular token in today’s market that offers stability, stable coins and a great Proof-of-Stake blockchain to build on top of. As this asset is now ranked as the 8th biggest cryptocurrency on the market (by market cap) there are a wide range of interfaces you can use to buy, sell and trade it. So for this reason we have compiled this easy to read table so you can see the best ways to invest in Luna in 2022.

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What Is Terra LUNA - Quick Overview

Name and tickerTerra (LUNA)
Date launchedJanuary, 2018
Circulating supply | max supply:343,283,711.22 | uncapped
Blockchain networkTerra blockchain
CreatorsDo Kwon and Daniel Shin
Use-casesPeer-to-peer electronic cash system, stablecoins, international transactions, stablecoin ecosystem.
Social mediaTwitter | Reddit

What is Luna - Explained

History

Luna, also known as the Terra Network, was orgainlly formed by Korean blockchain company Terraform Labs. In fact, it was originally formed by the Terra Alliance, a conglomerate of 15 e-commerce companies in Korea. This interenched link to e-commerce and the business world is a key aspect of what makes Luna such a special token. It was founded by Do Kwon and Daniel Shin who were computer scientists and economists respectively; both are now entrepreneurs and have several businesses and startups.

What Is It?

At its core Terra LUNA is a peer-2-peer digital cash service that seeks to offer the same stability of transaction as traditional finance through the means of stable coins. It also allows the creation of new stable coins pegged to different fiat currencies. For example, in April 2019 Terra’s KRT stable coin launched, a token pegged to the Korean Won - this token is used by over a dozen applications for payment settlement. It also offers a stable coin pegged to the US dollar called UST which is an incredibly popular token.

How Does Luna Work?

Terra uses a version of the Proof-of-Stake consensus mechanism. One key difference with the Terra Network is that the amount of validators it uses is quite low. There are only 100 key validators that essentially confirm the network’s transaction. But the low number of validators means that Terra LUNA is more centralized than some other networks. When mining and validating is spread over a smaller group it means there is less decentralized distribution within the network.

It is also a very well performing network that is able to perform around 100 transactions per second, with most transactions taking an average time of six seconds and only costing a few cents.

The dollar-based stable coin UST is also one of the most popular cryptocurrencies on the market. This is where a lot of the demand for LUNA comes from because if you wish to mint any UST then you must burn the equivalent dollar amount of LUNA to do so. This has a great deflationary effect on the network and also drives up demand for the native LUNA token. You can also reverse this concept and burn any amount of UST to receive the equivalent amount in LUNA, which is an interesting feature. This balancing of supply and demand with the native stable coin UST and the native token LUNA is a really clever way of making sure the UST stable coin is pegged to the right dollar amount.

Market Performance

LUNA has been steadily growing for some time now. It quickly found itself a place in the top 10 cryptocurrencies, as also UST has, and is now priced at $85 per LUNA. Many speculators are bullish on Luna because of its links to business and its clever tokenomics.

How To Buy Luna

To buy any token you will need an interface. There are a host of different options to you, but most will require you to verify your identity and create an account with some sort of platform. Here we have laid out your options.

You can buy LUNA using any of the following platforms:

  • Brokerages: LUNA is available on a good range of brokerages compared with other cryptocurrencies - this does include eToro and Trading 212.

  • Exchanges: Almost all exchanges will list LUNA because they offer a good range of variety and it's one of the popular tokens to trade on the market; exchanges provide slightly lower fees than most brokerages but can be more complicated.

  • Decentralized Exchange (DEX): These operate in the same way as a traditional exchange, but are unregulated and are not owned/operated by a singular entity. DEXs usually have a great range of coins for users to choose from as they are a key part of the blockchain metaverse and have almost no restrictions.

  • P2P: Person to person exchanges offer great rates due to the lack of a middle man; it's best to think of this as swapping rather than trading.

How To Sell Luna

You can sell your LUNA using any of the methods we have shown above under How To Buy Luna. Again, most platforms will require you to verify your identity and create an account; additionally you will need to own the token directly or via a derivative.

With some platforms, like an exchange, you are able to transfer any holding of LUNA you may already have to that platform and then sell it there. Whereas with something like eToro you will first need to buy LUNA on the platform, and then also sell it there.

We advise that you first check the fees you may incur when transferring crypto assets from platform to platform as it can be quite costly.

Alternative Ways to Invest in Luna

Due to Luna’s popularity, we are now seeing this token becoming available for purchase in the form of more traditional financial products like derivatives. The crypto space is now beginning to merge with these traditional products and we are seeing a wide range of the most popular coins expanding how investors can own their assets. Here is a breakdown of some of the alternative ways you can invest in Luna.

Contracts For Difference

You can use brokerages to buy LUNA CFDs; CFDs are a contract you agree to when you complete your purchase. They pay you rewards if the asset price rises or you incur losses if it goes down. You do not own or hold the asset with derivatives.

LUNA is not currently available to buy in any of the following ways:

  • EFTs

  • Index Funds

  • Mutual Funds

  • Trusts

  • EFTs

Is It Safe to Invest in Luna Right Now?

Crypto markets are extremely volatile and carry huge risk, so we advise you to always be careful with these assets and your own due diligence. The same especially applies for CFDs; 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Luna currently sits as the 6th largest cryptocurrency by market cap. While this means there is a lower chance of huge gains than some other Alt coins, it arguably represents one of the more secure options - at least in terms of the Alt market.

Terra LUNA has been a consistently rising asset since early 2021 and has continued to reach new highs over the past 16 months. It seems that it has experienced two large pumps, hitting just shy of $100 at the end of 2021 and $116 in April 2022. Right now it sits at around $85 per LUNA which is relatively high for it; potentially this means it is due a dip but clearly it is no stranger to the low $100 mark.

The long-term is where analysts predict the best outcomes; some five year predictions go as high as $500 per LUNA. But this is a very volatile asset that could just as easily fall as it could rise.

Joshua Sherrard-Bewhay

Joshua Sherrard-Bewhay

Josh is a finance and Blockchain technical writer with experience in project design, consultancy and reporting. He is well-versed in white paper design, blog construction and freelance journalism. His academic credentials are in International Relations, Environmental Regulation and International Law. In his spare time he works as a sustainability analyst for a FinTech start-up Oxari and a private English tutor.