People walk through the North American Bitcoin Conference held at the James L Knight Center on January 18, 2022 in Miami, Florida.
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The Luna Foundation has raised $ 1.5 billion in bitcoin to increase its most popular stablecoin reserves, known as US Terra.
Stablecoin is a cryptocurrency that directs market value to more stable assets. This latest transaction by the Luna Foundation Guard brings it even closer for the purpose of collecting $ 10 billion of bitcoin to make US Terra or UST stablecoin.
Do Kwon, cofounder and CEO of Terraform Labs, the group that launched the Terra blockchain, said he expects a $ 10 billion target by the end of the third quarter.
The reserves currently contain about $ 3.5 billion in bitcoin, which makes the UST Forex Reserve the top 10 bitcoin holders in the world. It also grabbed north of $ 100 million in avalanches, another cryptocurrency.
In its most recent bitcoin acquisition this week, Luna Foundation Guard closed a $ 1 billion OTC swap with major crypto broker Genesis for UST $ 1 billion. It also bought $ 500 million of bitcoin from crypto hedge fund Three Arrows Capital.
US Terra also joined the top 10 cryptocurrencies by market cap, according to CoinGecko.
“For the first time, you start to see pegged currencies trying to observe bitcoin standards,” Kwon said. “It’s making a strong directional bet that storing a lot of these foreign reserves in the form of real digital currency would be a winning recipe.”
“The jury is still ineffective on the matter, but I think this is symbolic because now we live in a time when there is an excess of money printed on the board and when monetary policy is very political if there are independent citizens. Manage to try to bring the system back into paradigm better money, ”Kwon added.
Crypto fluctuations and large institutional buys
On Thursday, the price of bitcoin was down about 5%. Luna, the governance token of the Terra blockchain, slid 7%. The move came along with a wide and clear stock decline.
The last time Luna Foundation Guard bought $ 1 billion in bitcoin, bitcoin peaked at $ 48,000 for the first time since December 31 and luna reached an all -time high.
“Buying a bitcoin company can greatly affect the value of the currency and the board itself,” said Joel Kruger, crypto strategist for LMAX Group. “With more demands from institutions, liquidity is added and long -term interest, while asset class validation is done at the same time.”
In addition to increasing reserves, the parties to this latest agreement have a mission to bridge the gap between traditional finance and native crypto platforms and protocols.
“There’s traditionally there’s a gap between where native crypto market participants participate and Terra at the far end of it, it’s designed by crypto-native people for crypto-native,” said Josh Lim, head of derivatives at Genesis Global Trading.
“There are other corners of the market that are mostly institutional,” he said. “They’re still waiting on things like buying bitcoin, putting it in cold storage, or doing CME futures on bitcoin. They’re an inseparable part of the market and Genesis is trying to bridge that gap and allow more institutional capital to come. A competitive world.”
Genesis has one of the largest wholesale credit businesses in crypto. By participating in this transaction with Luna Foundation Guard, the company builds reserves at luna and UST and uses it to liaise with borrowing partners, who may want to gain access to the crypto ecosystem in a neutral way.
This also allows Genesis to distribute some of Terra’s assets to partners who may find it difficult to receive those assets on the exchange.
“Because we are more of a well -known institutional partner – trading more on the spot, the OTC side – we are able to supply this resource on a large scale and then deliver it to people,” Lim said. .
