Luna Foundation Guard Buys Another $1.5 Billion Worth of Bitcoins to Secure TerraUSD Stablecoin
The Luna foundation Guard, the non-profit organization behind the Terra cryptocurrency, continues to add more Bitcoins to its reserve in order to further secure its TerraUSD (UST) stablecoin.
On Thursday, May 5, The Lunda Foundation Guard purchased an additional $1.5 billion worth of Bitcoins. As per details, LFG closed a $1 billion OTC swap with crypto prime broker Genesis Global Trading against $1 billion in UST payment. It purchased an additional $500 million worth of Bitcoins from crypto hedge fund Three Arrows Capital.
As of date, the LFG holds a total of $3.5 billion worth of Bitcoin making the organization among the top 10 Bitcoin holders in the world. Terraform Labs has pledged to add a total of $10 billion worth of Bitcoins. Do Kwon, cofounder and CEO of Terraform Labs, expects to achieve this milestone by the end of the third-quarter of 2022.
With the latest development, Terra’s UST stablecoin also grabs a spot among the top ten cryptocurrencies by marketcap. It is already the third-largest stablecoin after Tether’s USDT and USDCoin (USDC).
Speaking of the development, Kwon said: "For the first time, you're starting to see a pegged currency that is attempting to observe the bitcoin standard. It’s making a strong directional bet that keeping a lot of those foreign reserves in the form of a digital native currency is going to be a winning recipe.”
Critizing the centralized monetary systems and the money printing by the central bank, Kwon further added: "The jury's still out on the effectiveness on the subject, but I think it is symbolic in the sense now that we live in a time where there's excess money printing across the board and when monetary policies highly politicized that there are citizens that are self-organizing to try to bring systems back to a sounder paradigm of money”.
However, soon after the news of the purchase came, the Bitcoin price has corrected a strong 10%. Earlier today the BTC price tanked all the way to $36,000 losing its crucial support of $37,500. Analysts are expecting that Bitcoin can sink further all the way up to $30,000.
Genesis Trading has been one among the largest players in the wholesale lending business in crypto. With this transaction, the company is also building its reserves in LUNA and UST.