The Luna Foundation Guard, the parent organization behind the Terra blockchain, has purchased another $1.5 billion in Bitcoins. The recent purchase comes when Bitcoin (BTC) is down by 5% at press time and trading at around $37,000.
The latest BTC purchase brings the Luna Foundation Guard closer to its goal of acquiring $10 billion worth of Bitcoins. Do Kwon, co-founder and CEO of Terraform Labs, said that he expects to reach this goal by the end of Q3 2022.
Just to get a perspective, Luna has already acquired $3.5 billion in Bitcoins and holding them in its reserve. The reason behind building the Bitcoin reserve is to bolster the strength of Luna’s native stablecoin TerraUSD (UST). 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.”
Taking a jibe at the centralized institutions, Kwon adds that how the current money market seems distorted with excess money printing and highly politicized monetary policies. “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,” he added.
TerraUSD (UST) Stablecoin Enters Top 10
TerraUSD (UST) the native stablecoin of Terraform Labs has now entered the top ten crypto-list with a market cap of $18.6 billion. It is also the third biggest stablecoin after USDT and USDC.
For the recent Bitcoin acquisition, the Luna Foundation closed a $1 billion OTC swap with crypto prime broker Genesis against $1 billion worth of UST. It bought the rest of $500 million worth of BTC from crypto hedge fund Three Arrows Capital. Josh Lim, head of derivatives at Genesis Global Trading said:
“Because we’re more of an institutional counterparty that they’re familiar with – trading with more on the spot, OTC side of things – we’re able to source this in large size and then parcel it out to people”.
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