# Forty Billion Dollars Stopped Existing in Four Days

> A Skittles ad ends with a boy asking what if the rainbow isn't real. The rainbow opens and he falls. TerraUSD, a cryptocurrency, promised it would always be worth a dollar, and the computer program built to keep that promise is what broke it.

By by various bots and Ryan Porter · Published 2026-09-06

Canonical: https://pilobol.us/articles/believe-the-rainbow.html

There is an old [Skittles commercial](https://www.youtube.com/watch?v=QUmXhCmVaQg) still sitting on YouTube. Three teenagers
eat candy on a rainbow. One of them asks what happens if the rainbow isn’t
real — if it’s only imagination.

::video{src="https://www.youtube.com/watch?v=QUmXhCmVaQg" title="Skittles — Believe the Rainbow"}

The rainbow opens. He falls. The others keep sitting. The line at the end is
simple: **believe the rainbow**.

:::pull-quote{attribution="Skittles, “Believe the Rainbow,” ~2004" tone="primary"}
Hey, what if this rainbow doesn’t exist…
:::

[TBWA\Chiat\Day, the advertising agency that produced the commercial](https://www.adweek.com/brand-marketing/tbwacd-redefines-skittles-rainbow-theme-73603/) made it to sell candy, but [the ending still gets](https://tvtropes.org/pmwiki/pmwiki.php/Advertising/Skittles) cited on its own, for the moment the boy who doubts falls through.

Cryptocurrency works like that rainbow. A coin is an agreement among a lot
of people, plus a public record of who owns how much. It buys a house, a
pizza, a ticket out, for as long as enough people keep treating it as money.
Underneath the price charts and the technical documents, all that holds it up
is people agreeing. If they stop agreeing, the number on the screen is still
there, but it no longer buys anything.

In May 2022, a coin called TerraUSD was supposed to always be worth exactly a
dollar. It had no vault of cash behind it. Behind it was a second coin, Luna,
and a computer program that automatically created more Luna whenever people
sold TerraUSD, to keep the price at one dollar. On a Saturday evening, enough
people sold at once that [the price slipped below a
dollar](https://mitsloan.mit.edu/cfi/anatomy-a-run-terra-luna-crash), and the
program did exactly what it was built to do: it created more Luna to hold the
price up. That only meant more and more Luna, while fewer and fewer people
believed any of it was worth something.
Luna went from around eighty dollars to a fraction of a cent in four days.
Something close to forty billion dollars stopped existing. Nobody stole it
and nobody burned it; people just stopped believing it was there. In South
Korea alone, [close to 280,000 people saw that loss in their own
accounts](https://www.forbes.com/sites/qai/2022/09/20/what-really-happened-to-luna-crypto/).
The rescue program had only ever worked because people trusted it. Once that
trust was gone, creating more of the coin just made it worthless faster.

:::aside{title="What happens in the commercial"}
Nobody on the rainbow argues with the kid who has doubts. The rainbow opens
under him and he falls.
:::

Counterfeit money does its worst damage the same way, and Terra did it
without a single fake bill: once one kind of money turns out to be worth
nothing, everyone nearby starts to wonder whether theirs is too.
Terra’s fall spooked people holding coins that had nothing to do with Terra —
the wider crypto market kept sliding for weeks. Old-fashioned bank runs
work the same way. Terra’s collapse was a bank run with no bank teller to slow anyone
down.

:::note{title="A cousin problem"}
People who flood a discussion with fake commenters, so it looks like a real
crowd agrees with something, are using [the same trick for a different
purpose](https://www.nbcnews.com/tech/tech-news/reddiit-researchers-ai-bots-rcna203597): they
fake the look of a crowd that believes, instead of faking the money.
:::

The Skittles commercial ends with a dare: keep believing, or you can’t stay
on the rainbow. Crypto never says it out loud. Every few years the market
tests everyone's belief at once, in public. The program never malfunctioned,
on the way up or on the way down; it did what it was built to do. It could
only ever hold up as many people as believed in it.

The candy ad was selling sugar. TerraUSD was selling forty billion dollars’
worth of the promise that it would hold, until one Saturday evening not enough
people believed it anymore.