- Terra’s Luna Basis Guard has purchased greater than 37,000 extra Bitcoin.
- The worth of Terra’s UST stablecoin is backed partially by its Bitcoin reserves.
- Terraform Labs’ CEO Do Kwon has been clear that he needs to see UST dominate the stablecoin market.
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The Luna Basis Guard has added to its Bitcoin reserve fund with help from Genesis Buying and selling and Three Arrows Capital.
LFG Buys One other 37,863 Bitcoin
The Luna Basis Guard isn’t finished accumulating Bitcoin.
The nonprofit group, which launched this yr to stabilize Terra’s UST stablecoin, announced Thursday that it had acquired one other 37,863 Bitcoin, bringing its whole reserves within the primary crypto to round 80,394 cash. That makes LFG one of many world’s largest Bitcoin “whales” with a stash value just below $3 billion.
Terra’s growth firm, Terraform Labs, shaped LFG again in January in a bid to help the Terra ecosystem. On the time, Terraform Labs CEO Do Kwon stated that the goal was to “constantly help the peg stability of Terra’s stablecoins” and different developments within the Terra ecosystem.
Terra, LFG, and Kwon himself have taken the highlight in crypto over the previous few months after the inspiration dedicated to accumulating Bitcoin and different property reminiscent of Avalanche’s AVAX to behave as a reserve fund for UST. On a number of events, Kwon introduced that LFG had made a multi-million greenback Bitcoin buy so as to add to the reserve fund, at instances renewing curiosity out there and serving to Terra’s LUNA soar to new highs. Kwon has stated that LFG plans to purchase $3 billion value of Bitcoin with a long-term view towards accumulating a $10 billion provide of cash. Kwon has additionally made it clear that he needs to see UST turn into crypto’s dominant “decentralized cash” stablecoin, brazenly slamming MakerDAO’s DAI, one other decentralized competitor within the stablecoin market, and proposing a Curve “4pool” that goals to starve DAI of liquidity.
3AC’s Market Performs
Whereas LFG has been shopping for Bitcoin over latest months, the newest buy is notable because it entails two different crypto-native corporations. First, it traded $1 billion value of UST for Bitcoin in an over-the-counter swap with Genesis Buying and selling. It additionally purchased $500 million value of Bitcoin from Three Arrows Capital, a multi-billion greenback crypto hedge fund run by Su Zhu and Kyle Davies. Zhu, who was chosen as one in every of Crypto Briefing’s high crypto villains of 2021, is understood in crypto circles for sharing his bullish takes on Bitcoin and the broader market, however right this moment’s announcement means that his agency is “dumping” reasonably than bidding. Nonetheless, Three Arrows Capital oversees one in every of crypto’s largest funds, so one $500 million sale doesn’t essentially paint an image of its general outlook available on the market.
The sale isn’t Three Arrows Capital’s first association with Terra and LFG. In February, the agency co-led LFG’s $1 billion LUNA token sale to assist it construct its Bitcoin reserves.
Regardless of LFG’s relentless shopping for, its latest strikes have finished little to construct market sentiment. Now in its seventh month of rocky value motion, Bitcoin took one other dip right this moment, erasing the features it posted Wednesday within the wake of the Federal Reserve’s 50-point rate of interest hike. The highest crypto asset is buying and selling simply above $37,000 at press time, about 46% in need of its all-time excessive.
Disclosure: On the time of writing, the writer of this piece owned ETH and several other different cryptocurrencies.