The Terra Luna (LUNA -1.79%) comeback continues. After blowing up spectacularly earlier this year, Terra Luna is back in the form of Terra Luna Classic (LUNC -1.42%), which was formed from the ashes of the original Terra blockchain. In September, Terra Luna Classic was one of the top-performing altcoins, and there are now petitions all over social media for exchanges Coinbase Global and Robinhood Markets to list Terra Luna Classic for trading. At one point in September, Terra Luna Classic was up 400%, bringing with it a lot of attention from speculators.

But is Terra Luna Classic right for your crypto portfolio? Keep in mind: The old Terra Luna went from $100 to nearly zero in a matter of days, dragging down the entire Terra blockchain ecosystem and contributing to the implosion of the crypto industry. Is it really possible that, less than five months after such an epic disaster, Terra Luna is ready for a comeback?

Financial alchemy

To answer this question, you first have to understand that a lot of financial machinations have taken place within a relatively short period of time. After the collapse of the Terra ecosystem in May, the team behind Terra Luna decided to "fork" the Terra blockchain into two different chains. There would be an entirely new chain called Terra 2.0, and the continuation of the original blockchain called Terra Classic. The naming convention was meant to evoke the split of the original Ethereum into Ethereum and Ethereum Classic. Plus, the term "classic" has a sort of warm and reassuring feel to it. It's not really a word one associates with toxic financial products.

A person puts their hand on their forehead in regret.

Image source: Getty Images.

From this perspective, Terra Luna Classic is really just a clever rebranding of the old Terra Luna. Nothing new has really been created. It's literally financial alchemy, or turning the equivalent of lead into gold. The goal appears to be to take a crypto worth close to zero ($0.0003, to be exact) and transform it into something that has some sort of value. 

If you're a cynic, it's easy to see this as a desperate ploy by people who lost their life's savings on Terra Luna to get something -- anything! -- out of a failed investment. The old Terra Luna traded for close to $100 when disaster struck, so financial speculators everywhere are watching this saga closely. Even if Terra Luna Classic only makes it back to the $1 mark, it would be a huge financial gain for them. 

Can you rebrand a crypto?

There is an old saying on Wall Street that "You can't put lipstick on a pig," and yet, that's exactly what the backers of Terra Luna Classic are trying to do. They are trying to take a piece of wreckage that's worth close to nothing and convince other people that it is worth something. That might explain the coordinated social media campaign to get Coinbase to list Terra Luna Classic. 

If Coinbase decides to make Terra Luna Classic available for trading, that would provide greater liquidity for this crypto and give it a veneer of respectability. Or, if you prefer, it would be the lipstick on the pig. Right now, there are not a lot of major cryptocurrency exchanges where you can buy and sell Terra Luna Classic, and for good reason.

Good money after bad

When you add in the fact that the original founding team of Terra Luna is now facing legal jeopardy in jurisdictions around the world, including in Terra's home country of South Korea, you can start to understand better why an investment in Terra Luna Classic is potentially so toxic. Even Interpol is interested in talking with Terra's founder, Do Kwon. There is a distinct possibility that, even if Terra Luna Classic continues to pump -- in crypto lingo -- it could still all go to zero in a matter of days, just as the original Terra Luna did. 

There are plenty of other speculative cryptos out there that have a better chance of making a huge return for you. Don't throw good money after bad. The great writer F. Scott Fitzgerald once remarked, "There are no second acts in American lives." If he were alive today, he would probably agree, there are no second acts in the crypto industry, either.